The Simple Guide.to Real Estate
Curated by Justin Baarts 

Is a Deposit Required?

Technically, a deposit is not 100% needed for a contract to be binding. Once both you and the seller sign the agreement, you have a legal and binding contract.

However, in the "real world" of Kelowna real estate, a contract without a deposit is seen as weak. It tells the seller you might not be fully committed. The deposit is the seller's security between subject removal and completion.

The "Stronger Offer" Strategy

While not legally required to make the deal "count," the deposit is your best tool for negotiation.

If two buyers offer the same price for a home in Wilden or Upper Mission, the seller will almost always choose the one with the higher deposit. Why? Because it shows you have "skin in the game."

• The Psychology: A large deposit tells the seller you are financially stable.

• What is the "standard: 5% of the purchase price is the "standard amount" for a deposit. It can be lower or higher.

My Custom "48-Hour" Rule

When I write your contract, I include a specific clause to protect your cash flow while keeping your offer strong.

1. The Window: You have 48 hours after final subject removal to pay the deposit.

2. The Timing: This window does not include weekends or statutory holidays.

3. The Location: Your money is paid into the Engel & Volkers Okanagan trust account. It is held safely there until the home is yours.

How It Benefits You at Closing

Your deposit is not an extra fee. It is a "pre-payment" on your home.

When you meet with your lawyer to sign the final papers, the deposit is added to your total down payment. If you paid a $40,000 deposit, that is $40,000 less you have to bring to the lawyer’s office on closing day.

FAQs.

What happens to my deposit if I don't remove subjects?
This is why we don't pay the deposit until after subject removal. We ensure you're happy with the home’s value and condition before you put your cash into the trust account.

Is the deposit refundable if I change my mind?

Once you remove subjects and pay the deposit, it is legally "committed." If you walk away after that point, the seller likely keeps the money. Along with other legal implications.

I am planning to build a small home. How does this affect me?

You might find it easier to hire a construction crew since the government is building fewer large buildings. However, your costs for planning will go up. You will now have to pay an extra 7% tax on fees for your architect, engineer, and land surveyor.

Ready to use the deposit to your advantage?