How Much Deposit Do You Need When Making an Offer in BC?

When you decide to make an offer on a home in British Columbia, one of the first practical questions is how much money you need to put down and when.

There is no single figure that fits every purchase. This article explains how deposits generally work, who holds the money, how presales differ, and what to confirm with your realtor or lawyer before you sign.

This article covers the law of British Columbia.

How much is the deposit?

The amount is written into your offer, so it is something you and the seller negotiate rather than a fixed rule. Typical amounts vary with the market, the price and the circumstances, and your realtor or lawyer can tell you what is common for the kind of property you are buying.

A seller does not have to accept the deposit you propose. A seller can counter-offer to increase the deposit or to require it before subjects are removed.

When is it due, and who holds it?

A buyer usually makes a deposit with the offer or after the offer is accepted. It is usually held in the licensee's brokerage trust account, and the brokerage holds it as stakeholder. Exactly what that means for your deposit depends on your contract and situation, so it is worth confirming with a lawyer.

Why the trust account matters

Receiving deposit money in respect of real estate counts as trading services under the Real Estate Services Act. Licensees must pay money received into a trust account, and withdrawals are controlled by the Act. Breaking either of those rules is an offence.

A practising lawyer providing real estate services in the course of their practice is exempt from the licensing requirements. If a lawyer or notary is involved in your purchase, ask who will hold the deposit and where.

For presales, BCFSA can investigate if a deposit was not held in trust as required.

What if the deal does not go ahead?

Whether you get a deposit back depends on the wording of your contract and why the sale fell through. Some deposits can be lost if a buyer cannot complete. Under the Law and Equity Act, the court may relieve against all penalties and forfeitures, on terms it thinks fit, and this is the statutory basis on which a buyer can ask a court to relieve against forfeiture of a deposit.

That is a remedy to ask a court for, not an automatic result, so get legal advice before assuming you can recover money.

What to do next

• Ask your realtor how much deposit is realistic for the property and when it must be paid.
• Confirm in writing who will hold the deposit and in which account.
• Decide whether you want the deposit due at acceptance or after subjects are removed, and understand the seller may counter on that point.
• For a presale, ask how the developer will hold your deposit in trust.
• Have a lawyer or notary review the contract if you are unsure about what happens to the deposit if the sale fails.

Frequently asked questions