Many of our first-time homebuyers aren’t aware they need to deliver a deposit after an accepted offer. Most of the time, the burning question is what is this deposit and where is it going?
What is the deposit?
When we write your purchase agreement, aka the contract, we have to negotiate a deposit for your potential home. The amount of the “good faith money” is negotiable – but, it’s typically about 1% of the sales price.
Who holds the deposit?
Normally the listing brokerage will hold it. But, it is not uncommon to be held at the title company of the buyer’s choosing.
Is the check “cashed”?
Sure is! The check is normally cashed between 24-48 hours of being received.
If I cancel my contract, can I get my deposit back?
Yes and no. If you cancel during the inspection period – then yes, your deposit is refundable. If you cancel the contract after the inspection period and not due to financing issues, you forfeit your deposit.
If I buy the house, what happens to the deposit?
It can be a variety of things. It can be used towards your closing costs, down payment, or the check may even be returned to you!
Why is this necessary?
It is a show of good faith to the seller that you’re putting money up.
Have you ever had a buyer lose a deposit?
We haven’t – but we have seen other buyers lose their retainer. This is why honoring timelines is so crucial.
What if I don’t have the money?
We can still make an offer. But not many sellers accept a contract without a deposit.
How soon do I have to deliver it?
Within 72 hours of an accepted contract.
What if I don’t deliver the deposit in time?
The seller has the option of canceling the contract. Communication is key if you don’t think you can meet the 72-hour deadline.
Have other real estate questions? Great, we have answers! Text us!