Deposits and irrevocability, in plain terms

These two lines come up in every offer and they are the two buyers ask me about most.

The deposit

Your deposit is delivered after acceptance, usually within 24 hours, and it goes into the listing brokerage's trust account. It is not a fee. It is your money, applied to the purchase price on closing.

What it does is demonstrate capacity. Anyone can write a number on an offer. Moving real money into trust the next morning shows you have it and you mean it. On a competitive property, a strong deposit is often the cheapest way to separate yourself, because it costs nothing extra in the end.

Have it ready before you go looking. A bank draft on 24 hours' notice is fine. Discovering your funds are locked in something you cannot access is not.

Irrevocability

This is the deadline on your own offer. Until the seller signs it back, you can withdraw. After it expires, your offer is simply gone.

Short irrevocability creates urgency, which can help. It can also work against you. If the seller is out of town, or their agent needs time to reach them, a six-hour window can expire on an offer they would have accepted.

Standard is 24 hours. On an offer date, it is usually much shorter by design. Outside of that, ask what the seller actually needs rather than picking a number to apply pressure.

---

Written by Mike Elsey, Broker, Royal LePage Real Estate Associates, Brokerage. General information about the process in Ontario, not legal, financial, tax, insurance or inspection advice.