In order for a contract to be firm and binding, so we were taught at real estate school, it must be signed by the parties, sealed (whatever that means) and delivered (acknowledged in writing that a copy was given to the signers). We're also expected to submit "consideration" with the Agreement of Purchase and Sale, or as it's commonly known, a deposit. Except in Quebec and particularly within the Francophone community.
This was news to me until I spoke with the Broker Owner of the RE/MAX Westmount office in Montreal last week.
I was doing some research on behalf of a client. Let's call him Kevin since that's his name. This research is one of the many services I provide to my customers/clients in case you were wondering. Kevin's relative in Quebec was selling his house and when an offer was submitted, there was no mention of a deposit check. When Kevin heard of this, he was alarmed knowing that it was an important part of an Ontario contract and of course asked, "what's up with that?"
So, he called me. I in turn called Andre Campeau, the Westmount Broker. Since Andre is knowledgeable about real estate and since, as it turns out, he is a lawyer, he was the right guy to talk to.
As it turns out, this is somewhat of a Francophone Anglophone issue. Deposits are more likely (but not always) to be submitted with an offer within the English community but are seldom used in the French real estate community. I still don't know why this is. It just is OK?
There are exceptions of course. If the closing is particularly long then a deposit is requested. If the buyer is from "out of country" then a deposit is requested.
I think we agreed that it is a good idea to have one. Deposits have a psychological hold over buyers. First of all, they generally assume (unless informed otherwise) that the deposit is non refundable and therefore the need to close the deal is very strong indeed. Also, cutting a substantial check to accompany an offer solidifies the commitment perhaps not legally but at least psychologically.