So you find your dream home, submit an offer, and the offer is accepted that night. Now the clock starts ticking – you have 24 hours for your deposit cheque to be delivered to the listing brokerage. (Typically the buyer's real estate agent will pick it up from the buyer and then deliver it to the listing agent's office on behalf of the buyer).
It's something I find that a lot of first time home buyers are unaware of or maybe forget about in the middle of all the excitement from buying their first home. But if you don't deliver your deposit cheque in that 24 hour window the agreement is technically no longer valid.
The deposit is a sign of good faith – communicating to the seller that you are committed to buying their home. The deposit funds are deposited into the listing brokerage’s trust account until the property’s closing date. At that time, the funds are credited towards your down payment.
A deposit is typically around 3-5% of the offer price. So if you are offering $500,000 on a home, your deposit should be around $15,000-25,000. The larger your deposit the more committed the seller knows you are.
The important thing to remember is that your deposit funds need to be easily accessible since the turnaround time to get the deposit submitted is less than 24 hours.
My advise: before you start house hunting make sure you have your deposit funds in your bank account ready to be withdrawn at any time. If these funds are held in an ING savings account for example, it can take 2-3 days for the funds to be transferred to your primary bank account.
If you don't supply your deposit cheque within 24 hours of the offer being accepted, the seller has the right to accept an offer from another buyer, and your deal would be null and void. Proper preparation will help avoid this situation from happening.
More information: Calculate The Cost of Buying Your New Home