What is the timing of providing a deposit check for a home purchase offer?

As I understand there are 3 phases:

  1. parties verbally agree on a deal
  2. buyer signs a preliminary offer agreement and provides a check
  3. both parties sign a full purchase agreement

So, my concern is let's say I have a verbal agreement, so I fill out a written off and then have a bank check made out to the real estate agent's company and deliver it.

The problem is: what if they reject the written offer? Do they just hand me back my check? If so, this creates a problem because it is a bank check and most banks require some period of time (like 3 months) before they will cancel the check and refund me my money.

  • Where are you located? Deposit is typically a personal check. At closing is when you supply a bank check for the purchase amount. – paparazzo Feb 11 '18 at 18:32

I have seen as a negotiating tactic, attaching the check to the offer. That way it shows that you are serious. The check and signed offer are then sent electronically to the sellers agent. Of course the offer also has a expiration date.

Normally the deposit is made when the offer is accepted. Then the buyer is given X days to send a check or transfer funds into a designated account. If a check is used it is generally a personal check, because the amount is nowhere near 20%.

The document that specifies the conditions attached to the deposit should also mention deadlines for mortgage application, HOA document review, home inspection. That document will also discuss penalties related to cancelling the contract.

Your buyers agent should be able to explain this.

Also if you do need a bank check for any reason, it should be made out to Seller X or Five Bagger. That way if there is any problem, Five Bagger can redeposit the money back into their account. This is so the money isn't tied up if the settlement date is delayed, or there is a mistake in the amount.

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