Attention homebuyers! Do you know what the difference is between a deposit and a down payment? Are they the same? How much needs to be paid? What is the purpose of each?This is a common area where homebuyers (especially first-time homebuyers) face confusion. Though your lawyer’s office can readily answer questions when you have them, often the particulars of payment of these amounts are dealt with before your lawyer comes into the picture. Joe Richer, Registrar for the Real Estate Council of Ontario, wrote an article entitled “Deposit and down payment aren’t one and the same: Ask Joe” for the Toronto Star last month that provides a straightforward discussion of the difference between a deposit and a down payment. He also discusses other issues with each that can help you to protect your rights (i.e. should you pay a deposit directly to the seller?).Before you sign an Agreement of Purchase and Sale, this is a good issue to bring up with your real estate agent. If you do have questions about the deposit vs. down payment issue, this article will likely help to alleviate some of your concerns.
