A seller pays real estate commission to the realtor or realtors involved in the sale of your home. The commission amount is usually based on a percentage of the sale price and therefore will fluctuate. In Saskatchewan, both GST and PST are payable on real estate commissions.
As a seller, you do not have to pay the realtor the commission amount directly. The commission is paid out of the sale proceeds by your lawyer involved in the transaction.
As a seller, it is preferable to get as high a deposit on your home as possible from the purchasers. From a buyer’s perspective, they will likely want to give you a smaller amount. It all comes down to what amount is appropriate given the sale price of the home and how far off in the future the possession date is set.
If the deposit amount is high, the seller will have more comfort in knowing the purchasers are serious about buying the property. The purchasers will be less likely to break their commitment. If a seller takes a deposit of $1000, some purchasers may not care if they cancel the deal as that amount is all they potentially stand to lose. On the other hand, purchasers will rarely walk away from a deal knowing they will lose $10,000.
Obtaining a large deposit is especially important where the purchasers are asking you to take the property off the market for a lengthy period. For example, if the date of the Offer to Purchase is May 1st but the possession date is August 1st, your home is basically unavailable to sell to others over the summer. This scenario definitely warrants a firm commitment from a purchaser and the receipt of a large deposit.
The purchaser usually completes a cheque in favour of their realtor’s real estate firm. Later, the deposit amount is then used as part of the overall set of funds allocated for paying the commission as between both realtors and their respective real estate companies.
In the case of a private "For Sale by Owner," the deposit cheque should be made out in the name of the law firm you have retained "in trust" and forwarded to your lawyer for deposit into their trust account. Be mindful of details on the cheque and ensure it is properly signed and completed.