HOW MUCH DEPOSIT WILL I NEED WHEN BUYING A HOME?
by: Adrian Trott
When purchasing a piece of real estate, a deposit is required. Legally, to form a binding contract, some form of consideration is necessary and in the case of real estate, this is typically done by way of a sum of money provided to the listing brokerage.
The amount of the deposit varies depending on two variables; one, if you're purchasing a home directly from the builder it's common that they require 10% as a deposit. This amount is often broken down into 3 or 4 installments over the course of a few months and; two, if you're purchasing a resale home you're often able to get away with a deposit in the range of 2.5% - 5.0% of the purchase price or even less.
- NEW BUILD -- $500,000 property = $50,000 deposit (estimated)
Typical installments would be $10,000 at time of signing $20,000 in 30 days and $20,000 in 60 days.
- RESALE -- $500,000 property = $10,000 to $25,000 deposit
Resale deposits are most commonly provided in full at the time of signing or within 24 hours, however they can be structured differently, including the option of installments also.
The deposit in both scenarios may be negotiable, however builders are usually more firm on what's required opposed to a resale property. For more info on this subject check out the following video and be sure to subscribe to our Youtube video to catch our weekly videos!
If you have more questions about deposits or would like tips on buying your next home, give us a shout or shoot us a text!
Ariel: 647) 464-0957
Adrian: (416) 707-8401
The Kormendy Trott Team
Century 21 Miller Real Estate Ltd., Brokerage