The Deposit

depositThe deposit is a sum of money paid by the buyer at the time of submitting an offer to purchase real estate.

Purpose  The purpose of the deposit is to show “good faith” by the buyer that he or she intends to follow through with the terms of the sales agreement.  If the buyer does not live up to the agreement, the deposit shall be forfeited to the seller as payment for any damages suffered by the seller as a result of the sale not being completed as planned.

Amount  The amount of the deposit varies in different areas depending upon local custom or the specific needs of a particular transaction.  The size of the deposit will have an effect on the desirability of the offer.  Many buyers have won properties away from competing offers only because they gave a larger deposit than others being considered by the seller.  If you really want a piece of property, make sure your deposit is large enough to help your offer win acceptance.