How much of a deposit am I required to leave with a builder when buying pre-construction?

Category: Development


Hello I have been thinking about buying a pre-construction home in the Kitchener, Waterloo area and have a budget of just under 500K. I have about 50K in cash and another 50K on my home equity line of credit. How much of a deposit would I be required to leave with a builder?



Hi Jermaine,


Every developer has a different deposit structure.

Most developers require 20-25% before final closing, but that can take 2-3 years.

The most common practice is to provide a $5,000 – $10,000 cheque upon signing, which isn’t cashed until after the mandatory 10-day rescission period, or “cooling off period.

Then the balance of 5% within 30 days (ie. 5% minus the $5-10K deposit), with another 5% in 90 days, another 5% in 180 days, and so on, until the pre-determined amount has been reached, and the payment schedule has been satisfied.

Some developers will negotiate this payment structure, and some won’t.




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