Deposit, Appreciation in Value, New Builds
External shot of brick house with sun shining on it


Dear David,
Do I need to put down a deposit when buying a home? How much do I need? – Ready to Buy

Dear Ready,

Putting down a deposit on a home you intend to buy is standard practise and shows the seller that you are acting in good faith. The amount that the seller expects is generally included in the listing information. The amount of the deposit can sometimes be negotiated, and buyers may offer a more generous deposit in hopes of winning a seller over in this competitive housing market.

The deposit is due once your offer is accepted by the seller. As a buyer, keep in mind that you’ll need to be able to write a cheque to the deposit holder (usually the seller’s brokerage) for that amount within about 24 hours. The deposit will be held in trust until you remove your conditions, then applied towards the purchase price of the home. In the event that your conditions are not met, the seller’s brokerage will release the funds upon receiving written direction from both the buyer and the seller.

Dear David,
How much will my house appreciate in value? – Hopeful Homeowner

Dear Hopeful,

All things considered, house values here in K-W have typically increased about 4 to 5 percent each year over the past decade. In 2016, we experienced something new: a large influx of buyers from the GTA pushed the per annum increase into the double-digits for many segments of the real estate market (but not all). With a variety of factors currently driving the market, 2017 should be an interesting year. We can’t be sure whether home values will continue to increase at this accelerated rate or return to a more “normal” pattern, but either way, real estate continues to be an excellent investment.

Dear David,
I’ve been looking at new builds. The model homes look really tempting, but should I be considering resale homes as well? – Smart Shopper

Dear Smart,

There are a few things to consider when comparing new builds to resale. When buying new, you are purchasing at a price set by the builder, not the real estate market. Because of this, it’s wise to look at some resale properties in the same price range to make sure you’re getting a good value. When comparing prices, keep in mind that new builds often don’t come with fences, decks, water softeners, central air or finished basements, to name a few. If you want these things, you’ll have to factor in the cost of adding them after the fact. If these features were included in the purchase price (as they often are in a resale home), the cost can be amortized into your existing mortgage so that you don’t have to save up for each item separately.