I come across many people who are confused or intimidated by the various products or services or even terms commonly used in a real estate transaction, so I thought it would be helpful to add this section to my newsletter. I hope you find it useful, and if you have any particular terms you would like for me to deep dive into, reach out and let me know, it would be my pleasure.
Deposit: When submitting an offer for a property (or a lease), this is the amount that is promised to be delivered within 24 hours of an accepted agreement. It is provided via a certified draft or more commonly these days via wire transfer (paperless due to Covid), this payment ‘solidifies’ a deal.
The purpose of the deposit is to show a Buyers’ seriousness and intent, it is accompanied with the Offer to Purchase. This amount is typically 5% of the purchase price and is not to be confused as something given above and beyond your eventual downpayment, rather is part and parcel of it.