When you buy a new house, you will need to pay a deposit. Many new or first time home buyers have many concerns regarding real estate deposits. There is nothing complex about real estate deposits and your real estate agents will solve any queries you might have about them. But if you want to doubly prepared and have knowledge well in advance then we bring you some commonly asked questions about real estate deposits.
- The Payment Schedule
The laws governing the time limit for the first payment defer from state to state but it is preferred to deposit the first payment within twenty four hours of when you sign the agreement. The agreement refers to the finalized contract of the house you have purchased. When you deposit the payment early, you reinforce your commitment to the seller. This will make the transition easier for both the parties. This technological world has advanced quite a bit and therefore doing quick transactions should not be a complex thing to do. You can easily complete the transaction within twenty four hours and we encourage you to do the same to simplify the process further.
- Can You Refuse To Pay The Deposit And Get Out Of The Agreement?
Once you have signed on the dotted line and the sale has been approved by all the parties involved (the buyer and the seller), you can’t back out. If you fail to pay the required deposit then the seller can sue you for a breach of contract. You might think that hiring a good lawyer might get you out without any additional financial damage but the real estate experts say otherwise. If you have signed a contract and fulfilled all the paperwork then backing out will be difficult because the laws governing real estate contracts are very straightforward.
- What Will Happen If You Miss The Deadlines For Payments?
The seller can cancel the whole thing if you are late in depositing the required installment. This generally happens if the seller has many clients for the property you are buying. If the seller deems you unfit financially, he or she reserves the right to cancel the deal and approach another buyer. If there are going to be delays in payment, make it known when you are finalizing the agreement. Keep the seller in the loop if you won’t be able to make the required deadline for payment.
- How Much Should You Pay As A Deposit?
This is a tricky question and the answer keeps on varying at different places. In Toronto for example, buyers are required to pay about five percent of the total sale price of the house. The minimum deposit required depends largely on the seller and the area of the house. Therefore, consult your realtor to discuss what would be a fair minimum price for your real estate deposits because that would be the best way to decide if the seller is quoting a fair price or not.
- Where does the deposit go?
The deposit goes to the seller’s real estate agent as opposed to most people believe. The seller does not hold the deposit as a precautionary measure to prevent any abuse of trust. Your deposit will be held in trust and will also have the added protection of an insurance cover. This will protect you at all costs and in extreme cases, you can even get the money back.
So the above were some things that you should know about real estate deposits. This will help you become more aware and you will be able to make more informed decisions from here onwards. We hoped we were able to help you in some way and therefore don’t forget to comment below to tell us what you thought about this article. Do share your experiences and thoughts!