Real Estate

Bank Draft when offer isn't accepted

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  • Feb 20th, 2017 2:50 pm
[OP]
Sr. Member
Feb 10, 2008
644 posts
293 upvotes
Toronto

Bank Draft when offer isn't accepted

As I understand it, when putting in a bid on a house (resale), you need to include a rather hefty deposit in the form of a bank draft. When I've purchased in the past, I was the only offer so it wasn't a problem. However, if it's a multiple offer situation, and you make out the bank draft to the seller's realtor trust account, what happens if your offer isn't accepted?

Do I get the bank draft back and I can deposit it back into my bank? Can I even just deposit it as it's not made out to my name? I assume it isn't good for an offer on another place as it's been made out to a trust account...so I'll have to pay the bank for another one? Doesn't this get pricey if you have to do this multiple times on different houses?
27 replies
Deal Fanatic
Aug 25, 2005
5140 posts
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mrwally wrote: As I understand it, when putting in a bid on a house (resale), you need to include a rather hefty deposit in the form of a bank draft. When I've purchased in the past, I was the only offer so it wasn't a problem. However, if it's a multiple offer situation, and you make out the bank draft to the seller's realtor trust account, what happens if your offer isn't accepted?

Do I get the bank draft back and I can deposit it back into my bank? Can I even just deposit it as it's not made out to my name? I assume it isn't good for an offer on another place as it's been made out to a trust account...so I'll have to pay the bank for another one? Doesn't this get pricey if you have to do this multiple times on different houses?
Unfortunately, this is the process now a days. You can bring your bank draft back to your bank and they will cancel it and deposit it back to your account. Do not attempt to deposit it into the ATM.

If you're going through this process right now, I would suggest getting a premium chequing account that provides free unlimited bank drafts. TD (min $5,000 to waive monthly fees) and BMO (min $6,000) come to mind but I'm sure there are other options. Free no-fee bank accounts like Tangerine and PCF would have to mail you the bank draft or courier it at your expense causing delays that you might not be able to wait for in the house buying process.
Deal Fanatic
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Dec 24, 2002
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You could make your offer out and say you'll provide a draft within 24hrs of acceptance ...I've done that in the past , and explain to the buyers why
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Feb 2, 2014
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Toronto
mrwally wrote: As I understand it, when putting in a bid on a house (resale), you need to include a rather hefty deposit in the form of a bank draft. When I've purchased in the past, I was the only offer so it wasn't a problem. However, if it's a multiple offer situation, and you make out the bank draft to the seller's realtor trust account, what happens if your offer isn't accepted?

Do I get the bank draft back and I can deposit it back into my bank? Can I even just deposit it as it's not made out to my name? I assume it isn't good for an offer on another place as it's been made out to a trust account...so I'll have to pay the bank for another one? Doesn't this get pricey if you have to do this multiple times on different houses?
You just go back to the branch and deposit it...no issues.

I get free bank drafts from TD. Hopefully you bank doesn't charge much for cert cheques or bank drafts/
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
[OP]
Sr. Member
Feb 10, 2008
644 posts
293 upvotes
Toronto
CdnRealEstateGuy wrote: You just go back to the branch and deposit it...no issues.

I get free bank drafts from TD. Hopefully you bank doesn't charge much for cert cheques or bank drafts/
It'll be from PC Financial...so this could be an "issue". I'll have to ask them what to do when I call to get it.
Deal Addict
Sep 13, 2016
2803 posts
1554 upvotes
Mississauga
mrwally wrote: It'll be from PC Financial...so this could be an "issue". I'll have to ask them what to do when I call to get it.
You could ask them if they have some accounts which waive the draft fees. Like TD has an all inclusive account where most of the things like Interac transfer, cert cheques /drafts, chequebooks etc are provided without any fees.
Deal Guru
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Mar 31, 2008
11856 posts
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Toronto
mrwally wrote: It'll be from PC Financial...so this could be an "issue". I'll have to ask them what to do when I call to get it.
In the same situation as you. PC is a pain for this stuff. Great if you're life is linear. I'll prob open a TD account now.
Member
Mar 3, 2016
387 posts
236 upvotes
rb wrote: You could make your offer out and say you'll provide a draft within 24hrs of acceptance ...I've done that in the past , and explain to the buyers why
+1
Also done this. Made offer without draft. The draft would have been completely useless anyway since even the deposit amount was changed while negotiating. Went to get the draft the next day. In your agreement offer, in the deposit section, it is generally mentioned that, "upon acceptance", deposit will be delivered to the deposit holder within 24 hours of acceptance of agreement.
Penalty Box
Jan 13, 2017
456 posts
366 upvotes
can you not make the deposit to your own name
then just "endorse" to the seller at the back when the seller accepts your offer?
Deal Addict
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Nov 15, 2005
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I made a total of 4 offers, each costing me $15 for a bank draft. For the fax offers, my agent just sent a copy of my bank draft and when the offer was not taken, I just brought it back to the branch to cancel it the next day.

They even gave me a hard time when I deposited a bank draft from my lawyer, they said they had to hold it for a few days which I flat out said they couldn't. I was dealing with the same branch through the whole process and they knew I was making offers on a house. It was ridiculous and I was so pissed.
Sr. Member
Feb 16, 2011
621 posts
152 upvotes
mrwally wrote: It'll be from PC Financial...so this could be an "issue". I'll have to ask them what to do when I call to get it.
Also with PCF. From what I remember, a bank draft costs about $20. However, it can take up to 1 business day. When I phoned in a while back the lady said you could potentially do a same day rush...call in morning to order and pick it up in the afternoon from any CIBC branch. IMO that was a bit risky so I just opened up an account at a brick and mortar bank.
Deal Fanatic
Nov 22, 2015
5781 posts
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blitzteen17 wrote: Also with PCF. From what I remember, a bank draft costs about $20. However, it can take up to 1 business day. When I phoned in a while back the lady said you could potentially do a same day rush...call in morning to order and pick it up in the afternoon from any CIBC branch. IMO that was a bit risky so I just opened up an account at a brick and mortar bank.
Drafts with PC are $7.50 if you order it online and receive by mail. The $20 + $7.50 is the fee to have it rushed to a CIBC branch.

It's good to just have a savings account or PLC at a Big 5 bank for such situations.
Deal Expert
May 30, 2005
45458 posts
5970 upvotes
Richmond Hill
Sam9876 wrote: +1
Also done this. Made offer without draft. The draft would have been completely useless anyway since even the deposit amount was changed while negotiating. Went to get the draft the next day. In your agreement offer, in the deposit section, it is generally mentioned that, "upon acceptance", deposit will be delivered to the deposit holder within 24 hours of acceptance of agreement.
I've never heard that before, was your deposit amount very small or something?
Member
Mar 3, 2016
387 posts
236 upvotes
Jon Lai wrote: I've never heard that before, was your deposit amount very small or something?
Yes, the seller wanted more in deposit that I was offering initially.
Deal Addict
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Oct 24, 2005
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Burlington
Very interesting as when we bought not long ago and were putting in offers no one mentioned that they would have preferred bank drafts as opposed to regular cheques, from either the seller side or our realtors. As such, losing an offer didn't cost anything other than time and aggravation.
[OP]
Sr. Member
Feb 10, 2008
644 posts
293 upvotes
Toronto
Thanks for everyone's input. I do have an account with BMO specifically for this kind of thing, however in order to transfer the money, I'd have to deposit a cheque from my PCF account and it would take 5 days to clear.

I like the idea of saying I'll provide it after the acceptance.

Unless someone knows of a way to get approx $25k from PCF to BMO the same day with no hold on the funds? I don't think EMT can be used for that much money?
Deal Expert
May 30, 2005
45458 posts
5970 upvotes
Richmond Hill
mrwally wrote: Thanks for everyone's input. I do have an account with BMO specifically for this kind of thing, however in order to transfer the money, I'd have to deposit a cheque from my PCF account and it would take 5 days to clear.

I like the idea of saying I'll provide it after the acceptance.

Unless someone knows of a way to get approx $25k from PCF to BMO the same day with no hold on the funds? I don't think EMT can be used for that much money?
when are you providing the offer?

When things like this happen it's good to prepare ahead of time and have the funds already sitting in your account ready to make the bank draft at any time.
[OP]
Sr. Member
Feb 10, 2008
644 posts
293 upvotes
Toronto
Jon Lai wrote: when are you providing the offer?

When things like this happen it's good to prepare ahead of time and have the funds already sitting in your account ready to make the bank draft at any time.
I agree...I thought I was going to be putting in an offer last night and need the bank draft today, but after seeing the place, I have no interest and paying even close to asking price, so I may have time now to move the money. I just don't want it to get held up for 5 days or more waiting for a cheque to clear if it's possible.
Deal Addict
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Aug 10, 2015
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Elgin, ON
On both of my house purchases, my deposit was in the form of an ordinary cheque. The values were $5,000 or less though.

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