Short answer
The deposit shows commitment and becomes part of the purchase funds, but it is not a casual reservation payment. Confirm the amount, payee, delivery deadline, acceptable transfer method and source of funds before submitting the offer. If the buyer defaults, the deposit may be exposed and losses may exceed it.
The problem the buyer is trying to avoid
A buyer wins an offer and then realizes the deposit must be delivered quickly, the money is locked in an investment or the transfer limit is too low. Another buyer assumes walking away means losing only the deposit.
A practical Ontario example
Illustration only: An offer requires a $50,000 deposit within 24 hours of acceptance. The buyer has the money across two accounts but cannot move it in time and the lender later needs a 90-day trail. Before offering, Rajiv confirms accessible funds and documentation while the Realtor and lawyer confirm delivery wording.
Questions to ask before signing or waiving
- Is the deposit due with the offer, on acceptance or by a stated deadline?
- Who holds it in trust?
- Can the bank transfer that amount in time?
- Is the 90-day source-of-funds history clear?
- What happens under the agreement if a condition is not fulfilled or the buyer defaults?
Practical routes to compare
- Move documented funds into an accessible account before offer day.
- Verify wire instructions independently to reduce fraud risk.
- Never assume the deposit caps the seller’s possible claim; obtain legal advice.
Separate the offer from the mortgage approval
The Realtor advises on the offer and negotiation; the lawyer interprets legal wording and consequences. Rajiv checks borrower qualification, property acceptability, appraisal exposure, closing cash and lender conditions. A signed offer cannot require a lender to approve the borrower, property or price. An A lender is generally the first route when the complete file fits. Alternative lenders can consider broader income, credit or property situations at higher cost. MIC or private lending can sometimes bridge a short-term problem, but only where cost, equity and a realistic exit make sense.
Verified public guidance
Deposit amount and timing come from the offer and accepted agreement. RECO advises buyers to understand what they sign and keep enough room for total purchase costs. Legal consequences of default require advice from the buyer’s lawyer.
Read the primary source. Source checked 2026-09-03. RECO and CAO provide public consumer guidance; the agreement, lawyer’s advice and each lender’s current policy decide the individual file.
Pressure-test the recommendation
Ask what would make the advice fail. A condition may be too short to obtain an appraisal, the approval may still require documents, the property may be unacceptable, the buyer’s funds may be inaccessible, or the clause may not protect the issue the buyer assumes it covers. Confirm the deadline, who must be satisfied, what notice is required and what happens if the condition is not waived. Verbal reassurance should never replace the written clause, the lender’s remaining conditions or the buyer’s own ability to carry the financial risk.
Documents to have before the deadline
- Complete offer, schedules, amendments and notices
- MLS listing, property documents and comparable sales
- Mortgage approval with every outstanding condition
- Deposit and 90-day down-payment history
- Inspection, status certificate, appraisal or specialist reports when applicable
- Written lawyer, lender and Realtor explanations of unresolved risks
Related AskRajiv guidance
Continue with closing funds deadline source of money ontario, large deposit bank transfer before mortgage closing.
Get a mortgage strategy review before becoming firm
Use Rajiv’s direct mortgage strategy form. Include the offer deadline and the concern you cannot afford to discover after acceptance.
Source and review
Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, real-estate, inspection, appraisal, tax or mortgage approval advice.