Real Estate Term
Deposit
A sum of money paid as part of an offer to purchase, held in trust until closing.
What is Deposit?
A deposit is a sum of money a buyer submits with an offer to show they are serious, held in trust and applied toward the purchase price at closing. The amount signals commitment to the seller, and in a competitive market a larger deposit can strengthen an offer. If the buyer backs out without a valid condition, they may forfeit the deposit to the seller.
Frequently asked questions
Related terms
Offer to PurchaseA formal proposal to buy a property at a specified price and terms.EscrowA neutral third party that holds funds or documents until specific conditions are met.Closing CostsFees and expenses paid at closing, including legal fees, land transfer tax, and other charges.Down PaymentThe portion of the purchase price paid upfront by the buyer, typically expressed as a percentage.ClosingThe final step in a real estate transaction where ownership transfers from seller to buyer.
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