How big should my deposit be, and when is it due?
Big enough that the term reads as serious, and the offer tool in this app puts that at the middle of the three-step band it publishes: five percent of the price. That band is this app's own scale, not a measurement of anybody's market. It is credited against your down payment rather than added to your costs.
Caution: What we have not checked
There is no legal minimum, which is why this answer is filed as practice rather than under a statute: there is no rule here for you to look up.
What this app can tell you is what it holds. The offer tool sizes three deposits against your own offer price, a thin one, a middle one and a strong one, and the middle of that band is five percent. The band is this repository's own scale for how the term reads to a seller. Nothing in this build has seen a deposit on a real transaction, so take the figure as ours and not as a survey of what buyers around you are doing.
Timing is the part that catches people, and it is the part this app does not know. When the deposit is due, and in what form the funds have to arrive, are terms of the agreement you sign, and we have not read the form yours will be written on. Ask before you offer whether the deposit goes in with the offer or falls due after acceptance, and how long after. A short deadline on a Saturday evening acceptance means the money has to already be somewhere a bank can certify it on Monday morning, rather than in an investment or a locked savings product.
What it is: part of the purchase price, held in trust and credited on closing. What it is at risk of: forfeiture if you fail to close on an unconditional agreement, and it is the floor of your exposure rather than the ceiling, because the seller can also sue for their loss.
What it depends on
- what your own agreement says about the deadline and the form of funds
- whether there are competing offers for the deposit to be read against
- what the listing brokerage will accept as certified funds
Next questions
Can I back out of an accepted offer?
Only through a condition, before its deadline. Otherwise you are in breach: the seller keeps your deposit and can sue for their loss on resale, which Ontario courts have awarded well beyond the deposit amount.
Ontario
How do bidding wars actually work in Toronto?
The property is listed below market, offers are held to a set date, and you bid blind: you are told how many competing offers there are but not what they contain. Winning usually requires no conditions, which is where the risk sits.
City of Toronto