“At what point do I legally have to provide the deposit cheque?”
Usually, in residential real estate transactions, there is a standard agreement form used. This agreement offers the buyer two distinct payment options:
1) Herewith
2) Upon acceptance
“Herewith” means that the buyer must provide the deposit cheque alongside their offer for the property. This particular payment style is not commonly applied in contemporary real estate transactions. Mostly, the “herewith” payment style is reserved for scenarios in which there is a bidding war taking place between multiple buying parties, and buyers may use the deposit check as an additional tool to finalize the property deal in their favour. At this stage, it’s imperative to remember that the deposit check you provide must be either a certified or a draft cheque.
“Upon acceptance” means that the buyer has to provide the deposit cheque to the selling party within 24 hours of acceptance of the purchase agreement.
What happens if the deposit cheque isn’t submitted within 24 hours of the acceptance?
Usually this depends on the seller. Legally speaking, the seller has the right to pull out of the deal if they do not receive the deposit check within the allotted time.
In some cases, the seller may receive a better offer AFTER they’ve accepted your offer. If you don’t submit your deposit check within 24 hours, the seller is legally allowed to accept the better deal. So you must ensure that all due payments are made in the time stipulated in your purchase agreement.
NOTE: The standard agreement for a property transaction will stipulate the following:
For the purposes of this agreement, “upon acceptance” shall mean that the buyer is required to deliver the deposit to the deposit holder within 24 hours of the acceptance of this agreement.