When clients sit down with me to talk about writing an offer, one question comes up almost every time, usually a little nervously: So… what happens with the deposit?
It’s a fair question. For most people, it’s the largest amount of money they’ve ever sent to someone they’ve recently met. Here is how a real estate deposit in BC works, from how much to plan for to what happens if the deal falls apart.
The short answer: In BC, a real estate deposit is usually about 5% of the purchase price. It is typically paid after subjects are removed, held in the brokerage’s regulated trust account, and credited to your down payment on completion day.
What is a real estate deposit?
A real estate deposit is a good-faith payment that shows the seller you are serious and committed to the deal.
Here’s the part people often miss: it’s not an extra cost. Your deposit is part of your down payment. On completion day, it’s credited toward your purchase price. You’re not spending more; you’re just paying some of it sooner.
How much is a deposit on a house in BC?
The typical deposit in British Columbia is around 5% of the purchase price. On a $900,000 home, that’s roughly $45,000.
There’s no fixed rule. In a competitive situation, a larger deposit can make your offer stand out. Presales are their own world: developers often ask for 10 to 20%, paid in instalments over time.
When do you pay the deposit in BC?
The standard BC contract says the deposit is due within 24 hours of your offer being accepted, but this is almost always negotiated. Most of our clients pay their deposit within 24 hours of removing subjects, or within a couple of business days.
What are subjects?
Subjects are the conditions that protect you: financing, home inspection, review of strata documents, insurance and so on. You do your homework first, and you pay once you’re committed.
What happens if a deposit is late?
A late deposit is technically a breach of the contract. Whatever timing we agree on, I’ll make sure the deadline is one you can comfortably meet. Have the funds ready to move before the deadline, not tied up in investments. Banks often have daily transfer limits, and nobody wants to be on the phone with their branch at 4:45 on a Friday.
Where is my deposit held?
When you buy with Clover Residential, your deposit is held in our brokerage trust account. Trust accounts are strictly regulated under BC’s Real Estate Services Act.
The money can’t be spent, borrowed against or touched by anyone. It simply sits there, protected, until completion. Then it’s released to the lawyer or notary and applied to your purchase.
How do you pay a real estate deposit?
At Clover, we usually accept a bank draft or a direct bank-to-bank wire transfer. Cash and personal cheques aren’t accepted.
No matter how you pay, we’re legally required to confirm where the funds are coming from. That’s part of Canada’s anti-money-laundering rules, and it applies to every buyer, so don’t take it personally if we ask a few questions.
Do you get your deposit back if the deal falls through?
It depends on timing. Before subjects are removed, your deposit is generally returned to you. After subjects are removed, the seller is generally entitled to it.
Before subjects are removed
If a condition isn’t met, the deal ends and any deposit already paid is returned to you. Releasing it does require both buyer and seller to sign off, which is standard.
After subjects are removed
Now the deal is firm. If a buyer walks away or can’t complete, the seller is generally entitled to the deposit and may pursue further damages. Release of the deposit would require a mutual sign-off or a court order.
Deposit tips for first-time buyers in BC
Your deposit comes out of your down payment, not on top of it.
If your down payment includes funds from an FHSA, the RRSP Home Buyers’ Plan, or a gift from family, let’s talk about timing early. Those funds can take days or weeks to release, and your deposit deadline doesn’t wait.
Paying a deposit when moving to Victoria from another province or country
Many of our clients are relocating from other provinces or overseas, and a few extra steps apply.
- Start early with wire transfers. International wires can take several business days, and some banks place holds on large transfers. Build in a cushion.
- Expect ID verification. Federal rules require us to confirm your identity, and we can do this remotely.
- Watch out for wire fraud. This is the big one. If you ever receive an email asking you to send your deposit somewhere new, stop and call us at a number you already know. We will never change our trust account details by email.
- Check your eligibility. If you’re not a Canadian citizen or permanent resident, federal rules may restrict residential purchases, and additional taxes can apply. Let’s cover this before you fall in love with a house.
Frequently asked questions about deposits in BC
- Is the deposit part of my down payment? Yes. Your deposit is credited toward your purchase price on completion day, so it is part of your down payment, not an extra cost.
- How much deposit do I need to buy a home in BC? About 5% of the purchase price is typical. Presales often require 10 to 20%, paid in instalments.
- Who holds my deposit? With Clover Residential, your deposit is typically held in our trust account, which is regulated under BC’s Real Estate Services Act, until completion.
- Is a real estate deposit refundable in BC? Before subjects are removed, it is generally returned if a condition isn’t met. After subjects are removed, the seller is generally entitled to it if the buyer doesn’t complete.
- Can I pay my deposit in cash? No. Clover accepts a bank draft or a bank-to-bank wire transfer. Cash and personal cheques aren’t accepted.
The bottom line
A deposit feels like a big leap, but the system is built to protect you. Your money is held securely, your subjects give you room to do your homework, and a good agent will make sure you never commit before you’re ready.
Thinking of buying in Victoria?
Book a free buyer consultation with Ole and walk through the deposit, timing and numbers for your situation. He’s always happy to talk it through over coffee.
Or call us at 250-383-7100.
This article is general information, not legal advice. Your lawyer or notary can confirm the details for your specific purchase.
