- How much will the deposit for my house be?
- When do I have to pay the deposit?
While there is no specific amount that is legally required for real estate deposits in Ontario, and it usually varies on where the home is located, the standard guideline for deposits is 5% of your offer price.
In Ontario you usually have two options when it comes to paying your house deposit:
- Paying the deposit when you make an offer
- Paying within twenty-four hours after a seller accepts your offer
While most buyers prefer to pay after their offer has been accepted, paying when initially making your offer is considered a sign of good faith to the seller. Just be aware that if you do pay your deposit late, even by just a few minutes, the seller is within their rights to cancel the deal.
It’s important that you consider your options and identify the most suitable course of action for you when paying your house deposit. Whatever route you choose will be dependent on when you want to move into your new home, your lifestyle and your current financial situation.
You may consider:
- Saving for your house deposit over time. Depending on your lifestyle and current income, this option may take a significant amount of time.
- Borrowing the money for your deposit from friends or family
- Applying for a Deposit Guarantee, like Home Deposits Now, a smart alternative to a cash deposit. This option continues to get increasingly popular with homebuyers in Canada
To find out more about deposit guarantees read our blog post here.
Once the offer has been accepted, the buyer is required to pay the deposit. If the buyer refuses to, the seller can sell the property again and if it sells for less than what the buyer’s initial offer was, then the seller can take legal action against them.
After your offer is accepted, the money that you pay as your deposit goes towards the down payment on the property. You will then have to pay the closing costs, around 1.5% of the purchase price of the property, on the agreed closing date.
We hope this cleared up any confusion you may have about paying a house deposit in Ontario.
If you have any other questions or concerns check out our FAQ or we would be happy to help via chat, phone, or email! Get in touch with us here.