Thinking About Buying in BC? Don’t Forget the Deposit!
When most people start planning to buy a home, they focus on saving for the down payment. That’s an important step but there’s another cost that often catches buyers off guard: the deposit.
Once your offer is accepted, you’ll need to provide this deposit quickly, often within 24 hours. In British Columbia, it’s usually about 5% of the purchase price and is due either after your offer is accepted or once subjects are removed, depending on what your contract says.
The deposit shows the seller that you’re serious about your offer. It’s held in trust, and later, it becomes part of your down payment when the sale closes.
Example Deposits
A $600,000 purchase would need about a $30,000 deposit
A $1.5 million purchase would need about a $75,000 deposit
That’s a significant amount, and it needs to be ready fast which is why planning ahead is key.
Where Can Your Deposit Come From?
You have a few options for funding your deposit:
Savings: The simplest and most common source.
RRSPs: If you’re a first-time buyer, you can use your RRSP through the Home Buyers’ Plan.
Gifted funds: Money from close family members can be used if it’s properly documented.
Line of credit: This can work, but it’s best to talk to me first.
Deposit financing: Some lenders offer short-term financing specifically for deposits.
A Quick Tip
Before you start house hunting, make sure your deposit funds are liquid and easy to access. That means no waiting for investments to sell or transfers to clear when the right home appears. Being ready to move quickly can make your offer stronger and less stressful.
Buying a home is exciting and understanding how the deposit fits into the process helps you stay prepared and confident every step of the way.