The deposit
The deposit is paid shortly after your offer is accepted, not at closing. It is your demonstration of good faith — evidence that you are serious enough to put money at risk.
- Who holds it: ordinarily a brokerage, in trust. Not the seller, and not you. That protects both sides.
- What happens to it: it is credited toward your purchase at closing. It is not an extra cost — it is part of what you were going to pay anyway.
- If the deal ends during conditions: it is ordinarily returned to you. That is what conditions are for.
- If you walk away after conditions are removed: that is a different situation, and the deposit is what the seller looks to first. The detail →
There is no fixed amount set by law. What is customary varies with price and with how competitive the situation is, and a larger deposit genuinely strengthens an offer because it signals commitment with money behind it.
The down payment
The down payment is the portion of the purchase price you are not borrowing. It is paid at closing, through your lawyer, and the deposit you already paid counts toward it.
Minimum down payment in Canada is tiered by purchase price, and above a certain threshold a conventional down payment is required. Those thresholds and the associated insurance rules change from time to time, so rather than print numbers here that may be out of date when you read this, ask a mortgage broker for the figures that apply to your price range today.
How they fit together
Sequence, for a typical purchase:
- Offer accepted — you pay the deposit into trust within the timeframe the contract sets.
- Condition period — financing, inspection, condo documents. Deposit sits in trust throughout.
- Conditions removed — the contract becomes firm.
- Closing — you provide the balance of your down payment plus closing costs to your lawyer. The deposit is credited, and the lender advances the mortgage.
The practical consequence people miss: you need the deposit available in days, not weeks. If your funds are in a locked investment or arriving from overseas, start moving them before you write an offer — not after it is accepted.
And neither of them is closing costs
Closing costs are a third, separate thing — legal fees, Land Titles registration, adjustments, and so on. They are not part of the down payment and are not covered by it. In Alberta there is at least no land transfer tax to add. What you do pay →
How much deposit do you actually need?
There is no deposit amount set by law in Alberta. A deposit is whatever the offer says it is, and both sides negotiate it like any other term of the contract. What exists instead is convention — and convention moves with the price, the property type and how competitive the situation is on that particular home.
What actually drives the figure:
- Price. Deposits generally scale with the purchase price rather than sitting at a flat amount.
- Competition. A larger deposit is one of the few ways to strengthen an offer without raising the price. It is money at risk, so it reads as commitment.
- How the offer is written. A deposit payable on acceptance behaves differently from one payable on condition removal, and sellers notice which one you have chosen.
- What you can actually free up in time. An impressive deposit you cannot deliver by the deadline is worse than a modest one you can.
Two things buyers routinely miss. First, the deposit is not an extra cost — it is credited to your purchase at closing, so it is part of money you were paying anyway. Second, it has to be liquid within days, normally by bank draft or certified funds. If your savings are in a term deposit that matures next month, or arriving from another country, start moving them before you write rather than after your offer is accepted.
Before you write, we set the deposit to the property and the competition rather than to a rule of thumb. If you are budgeting the whole purchase, see what Calgary closing costs actually include, or talk it through with us first.
Can you get the deposit back?
While your conditions are still in place, ordinarily yes. That is precisely what conditions are for: financing, inspection and condo documents all exist so you can stop without losing the money if the answers are not what you hoped.
What surprises people is that “getting it back” is a process rather than a refund. The deposit is held in trust by a brokerage, not by the seller and not by you. A brokerage generally cannot release trust money on one party’s say-so — it needs the written agreement of both parties, or a court order. So even in a clean, uncontested collapse, someone has to sign a release before the money moves. Ask for it to be prepared the same day the deal ends, not a week later.
After conditions are removed, the position changes completely. The contract is firm, and if you do not close, the deposit is the first thing the seller looks to — and it is not necessarily the limit of what a buyer can be exposed to. What happens when a buyer backs out goes through that in more detail.
Whether a specific deposit is returnable in a specific situation is a legal question, decided by the wording of your contract and the circumstances. Get advice from a real estate lawyer on your own deal rather than from a general page like this one — including before you remove conditions, which is the moment the risk changes.