Deposits – how much? – When?

I’m often asked by our REALTORS® “how much should my Buyer offer, or my Seller accept, as a deposit on a Contract of Purchase and Sale?”
Like many topics in real estate, there are numerous points to consider.


As the REALTOR®- Who are you currently working for – the Buyer or the Seller?


As the Buyer: 

• what amount of funds are immediately available to you?
• Are you wanting to show this seller you have good intentions and are a serious purchaser.
• What are you prepared to risk?

As the Seller:  

• how long away is possession?
• How serious do these Buyers appear to be?
• What would be fair compensation should the Buyer fail to complete?

The process for the handling of the deposit funds is important to know – regardless who you are in the transaction.  The Buyer’s real estate Agent will collect a personal cheque (not ideal), a certified cheque (much better) or a bank draft (the best option for all parties concerned) and it will be payable to the name of  their REALTORS® real estate Brokerage.


As soon as the cheque is given to the representing REALTOR®, they MUST immediately turn it into their Brokerage for deposit into the Trust account – along with a copy of the accepted offer the deposit was taken for. They don’t hold it in their file or pocket until subjects are removed, or until the next time they make it into the office.  Holding clients’ money once they are in receipt of it is a serious breach of a REALTORS® duty and obligation.


The Brokerage will deposit the funds into a Trust account.  Trust Law governs what can be done with that money after that.  The only way the Brokerage can remove the money from their trust account is: 

• receiving written approval from all parties to the contract, 
• receiving written notice and instruction from the lawyers 
• or receiving written notice and instruction from  the courts.

Ideally, the subjects are removed by the Buyer and the contract goes Firm.  The Brokerage will receive written instruction from the Lawyers conveying the transaction to release those funds into their trust account and the deposit becomes part of the Buyers’ purchase funds that are paid through to the Seller at completion.

Now – back to the questions above.
If a REALTOR® is working for their Buyer, they would rather not require their Buyer to put up any deposit until they know the Buyer will remove all their subjects and make the firm commitment to purchase the property.  The Buyer may have their deposit funds tied up in RSP’s or GIC’s and can’t access the funds immediately at acceptance.  Some Buyer’s have given a deposit cheque thinking it just sits in the file and is not cashed until completion – they are very surprised when they get a call from their bank saying the cashing of that cheque has overdrawn their account.  It’s important the REALTOR® makes it clear that once we are in receipt of the funds – the cheque will be deposited and cashed.


If a REALTOR® is working for their Seller – they would be considered remiss, by not insisting that a deposit be taken upon acceptance.  The Real Estate Council and Continued Education Training, teaches REALTORS® that their sellers position is not adequately protected if no deposit is taken at acceptance.


The opposing sides to this often comes to light when a Buyer provides an initial deposit amount upon acceptance, doesn’t remove their subjects for one reason or another, and the Seller, upset that the deal is falling apart, refuses to sign the General Release.  This form is the “written permission from all parties to the contract” needed by the real estate brokerage to release the funds back to the Buyer.  Now, the Seller doesn’t necessarily have a legal right to refuse the return of the deposit but sometimes they believe the Buyer didn’t perform their due diligence adequately and feel the need to cause a fuss.  This is not probable…but possible. The fact that it could happen should be explained to the Buyer – rather than the REALTOR® saying, “Oh of course you’ll get your money back”. REALTORS® are usually successful in helping all parties involved to see the reasonable side of things, the form is signed and the funds returned to the Buyer.


The contract is often drafted that once the Buyer removes their subjects, another deposit amount is paid to the Brokerage.  This is added to the first amount received at acceptance – if it was – and the total deposit is sent through to the conveyancing lawyer to form part of the Buyer’s purchase price.  The lawyers will instruct the Brokerage to hold back the commission amount due to their REALTOR® and pay the balance through for the transaction.


If the Buyer, after the deal has gone firm, then defaults and fails to close the purchase, the deposit amount is usually claimed by the seller.  In this case, the Seller has a stronger legal position to lay claim to those funds.  The release of the deposit from the lawyers trust account is then negotiated the easy way or the hard way, most often by the lawyers acting for both sides.  When a Buyer fails to close on firm offer, they rarely get their deposit money back.


With all that in mind – the last question is “HOW MUCH?” Clients coming from different trading areas may have thoughts on what they feel is fair and expected.  The REALTOR® is in the best position to provide guidance.  If the offer is one of two or three others, the amount of the deposit can speak volumes to a deciding Seller – or judge, in the case of a foreclosure transaction.  The past real estate experiences either the Buyer or the Seller can affect their opinion of what to ‘give’ or ‘accept’.  The value of the property has a huge bearing on the amount of a deposit that is deemed ‘adequate’.  10%, give or take, is often a bench mark.

All circumstances vary and like all other terms in the Contract of Purchase and Sale, the Deposit can have an impact on the success of the negotiation.  A good REALTOR® knows that and can provide valuable guidance to their clients.

When the going gets "Tough"... just call me

Susan Tough

Famous Coldwell banker® listings/sales

Hope this finds you all having a good week.  I thought I would share some ‘gossip’ for you on some exquisite homes that are SOLD or marketed by Coldwell Banker REALTORS®.  It seems there are some substantial clients that are comfortable putting their faith in a Coldwell Banker® representative.


See this video by Christophe Choo with the Christophe Choo Group with Coldwell Banker Beverly Hills.

The Spelling Mansion mentioned in the above Video SOLD for an astounding $85 million dollars!

"The Jills" with Coldwell Banker Residential Real Estate of Miami Beach Florida list and buy for many celebrities. Here is an article regarding their recent listing of Tennis Star Anna Kournakovia's home.

Dennis Hopper's Art Compound is up for sale.

Marrisa Hopkins of Coldwell Banker Residential Brokerage has 
the Home Alone home listed.

"Even in good times the market for these more expensive homes is elongated. You don't sell these right away," says Joyce Rey, a Realtor with Coldwell Banker Previews International® who has brokered sales for Nicolas Cage, Jennifer Lopez and Hugh Hefner. "It's not as if there are 50 buyers out there looking for what you are offering."

"How do you get to tour such a home? Not during a Sunday afternoon open house, that's for sure. Instead, the process of viewing a celebrity home as a potential buyer is an arduous one. The Coldwell Banker brokers rigorously screen those who claim to be in the market to shelter celebrities from "vanity showings."

See the view from This celebrity home:

At a recent local function, I bid on a dinner for 6 at Ben Stewart's home (the Westside-Kelowna M.L.A. for the province of British Columbia). What a wonderful evening we had last night and look at the fabulous view of the lake. We are so blessed to live in the Okanagan.

When the going gets "Tough"... just call me

Susan Tough

But we can't sell it yet.......Can we?

Often a question comes up either from one of our REALTORS® or a seller who is faced with selling a property for a loved one that has passed away.

    "Can I list a property prior to probate being complete? "

The quick answer is "YES". 

REALTORS® are armed with their Professional Standard Manual (Pg 106 to be specific or online: "Buying from an Estate") that explains some of the details when buying or selling from an estate.

The most important thing when accepting an offer on an estate sale that has not yet cleared probate is to include:

Subject to the seller receiving the following by _______________

          (1) copy of a grant of probate or letters of administration which allows the property to be sold: and

          (2) assurance that everyone entitled to claim under the Wills Variation Act has waived or released their claims against the property.

This condition is for the sole benefit of the Seller.

This protects the Seller from committing to provide possession and completing on the transaction and then finding out later that 'Aunt Mary' wants the house and can claim title to it.  It's really inconvenient to then tell the Buyer - sorry - you have to move out.

For your entertainment:

Check out this Alan Thicke short video on "The Truth".......

When the going gets "Tough"... just call me

Susan Tough

TO STAY OR NOT TO STAY – THAT IS THE QUESTION?

Fixture vs Chattel

“But my Mom bought us that espresso maker - it cost us a fortune to pipe the water line to it. What do you mean I can’t take it??!!”

“That mirror was my great grandmother’s – there is no way I’m leaving it for the Buyers – they should have asked for it if it was important.  It’s a family heirloom and we are taking it!”






Through my real estate career as a producing REALTOR®, an Educator and Managing Broker, I use one test that I have found to be the most reliable in getting the point across to the client, very clearly.



I walk through the house with a screwdriver in my hand..... And simply say, “If you have to use this to take it – it stays – so take it down now - before we list the home or be prepared to leave it behind”






If the property is not affixed to real property it is considered chattel property. Fixtures are treated as a part of real property. A classic example of a fixture is a building, which in the absence of language to the contrary in a contract of sale, is considered to be part of the land itself and not a separate piece of property (a garden shed). 


Law students are taught in first-year property courses that chattels are items of moveable or transferable property, unlike land and buildings that are fixed and immoveable. If the items are neither land, nor permanently attached to land or a building, they are, by definition, chattels. (The word chattel dates back to feudal times when cattle were the most valuable item of property — except for land.) 


Typically, if an item is attached to land only by its own weight, it is not usually considered part of the land unless the surrounding circumstances make it clear that they were intended to be part of the land. 


By the same token, a fixture is a piece of equipment which has been attached to real estate in such a way as to become part of the premises, and its removal would do harm to the building or land. 

Using these definitions, a mirror that is hanging on a hook is a chattel and can be removed by the seller. 


The same mirror becomes a fixture if it is permanently attached or mounted to a wall in the house. 




A furnace delivered to a house, for example, is a chattel or item of moveable personal property when it leaves the store. When it is installed in the owner's house, and permanently connected to the ductwork, floor, electrical and plumbing systems, it becomes a fixture that remains with the building when the owner moves out. 


Over the years, courts have attempted in many cases to determine whether an object is a chattel or fixture. Judges will often examine the purpose of the attachment or annexation of the item to the property, and the actual degree or extent of the attachment.


The courts have developed two tests for determining whether an asset is a fixture or a chattel:

• the method and degree of annexation,
• the object and purpose of annexation. 

It is human nature that people want what they are told they can’t have – even if they really don’t want it.  I bet you would be hard pressed to find a REALTOR® who, at some point in their career, hasn’t replaced a mirror, special light fixture, under mount espresso maker, or similar to keep their seller or their buyer happy.


Buyers and sellers of land — and their agents — should always direct their minds to the question of chattels and fixtures before the agreement of purchase and sale becomes firm. 

When the going gets "Tough"... just call me

Susan Tough

Sources  for this blog:

*Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, 
*Wikipedia® Legal Term  is a registered trademark of the Wikimedia Foundation, Inc
*Real Estate Services Act, Real Estate Council of British Columbia

My drive to work...

My drive to work was very uplifting today…….  I live in Lakeview Heights West Kelowna.

 As I traveled down Mission Hill, Ridge and Vineyard View to our Westbank office, I passed ‘FOR SALE” signs.  Something that has jumped out at me over the last few weeks is the only sale signs that have SOLD on top of them, have been Coldwell Banker®!

That tells me a couple of things – even though our agents may not have brought the Buyers to the table (although on one sale we did that too), it shows the listing REALTOR® priced the home properly - #1 necessity to achieve a Sale. It also shows they exposed the listing to the market place very well.  ON LOCATION® videos are an amazing tool that our REALTORS® embrace!  The networking abilities, marketing skills and advertising creativity of Coldwell Banker agents get results.

Further down the street our Property Management Maintenance van was in the driveway of one of the rented homes our office manages.  Our landlords benefit from the convenience of time and cost savings our Maintenance Department can offer them.  We can deal with those pesky repairs that happen to every home in the course of its life time.

Further along my drive I passed the FOR SALE sign at a new development marketed by Coldwell Banker Horizon Realty.  Once again – three sales have been recorded lately by the listing agent – also representing the Buyer and assisting in a smooth transition to their new home.

I arrive at Vintage View to park in front of the beautiful two store office building – boasting the COLDWELL BANKER marque.

When our slogan says 

“We Never Stop Moving ®” – we mean it.!

Have a great Coldwell Banker® day – I know I will.

AND/OR Nominee...Or Not... and some stats.

From time to time REALTORS® are faced with a Buyer that instructs them to place  AND/OR Nominee behind their name on the purchase contract – explaining that they may want to put the property in a company name or might want to add Aunt Mary on to the title.

This situation can arise either before or after the execution of a contract of purchase and sale.  Using the terms “and/or nominee’ leaves room for the argument that the contract is unenforceable due to uncertainly of the identity of the Buyer.

According to the Law and Equity Act – real estate contracts are assignable by the Buyer as long as the position of the Seller is not compromised.  Some Buyers can argue the fact and feel they still need the reassurance of the term.  Rather – Council advises the REALTOR® to add the statement:

 “Buyer reserve the right to register the property in another name or entity upon completion”

The Buyer can instruct their lawyer conveying the transfer for them to register the title in the name of their numbered company – or Aunt Mary if desired.

When the Buyer is obtaining financing, be aware, that many lenders now require the contract of purchase and sale to be in the same names as the title to the property.  There may be an ‘amendment’ to the contract required to meet the requirements of the lender – they don’t like and/or Nominee either.

On another note, do you think it's a good time to buy?  Let's see what this article says...Kelowna Has No Housing Bubble to Burst.

When the going gets "Tough"... just call me

Susan Tough