The Value of Going Cashless
CATEGORY: Practice Tips
Cashless deposits aren't mandatory, but they sure are best practice
So your clients have put an offer down on their dream property. The offer is accepted and the next step is to put down the deposit. In most cases, your client will already have contacted their bank and lined everything up to make the transfer. But what about when your client is planning on giving a cash deposit?
While your client might have valid reasons for preferring cash, it exposes them—and you and your brokerage—to more risk. There's not only the risk that the offer will fall through if the client can't get to a bank in time to withdraw the cash, there's also the FINTRAC compliance risk and reporting responsibilities of a client using funds whose origins can't be verified. That's why many of BC's brokerages won't accept cash deposits and why BCREA and many of the province's 11 real estate boards have agreed to encourage all BC brokerages to take that approach.
With that in mind, BCREA turned to some of the province's REALTORS® to get their tips on how to set buyer clients up to go cashless. Here's what they had to say:
Have the conversation early about a cashless deposit.
This seems simple, but things can get complicated if you delay and your client finds themselves making an offer without the means to pay the deposit on time. Having that conversation early paves the way for a smooth transaction and allows both of you to focus on finding their dream home.
Be prepared to modify clause 2 in the Contract of Purchase and Sale.
Instead of stipulating that the buyer must pay the deposit with 24 hours of full subject removal; add not to include weekends or holidays.
Encourage your client to set up a direct deposit.
A REALTOR® doesn't have to complete a Receipt of Funds Record if the deposit doesn't go into your brokerage's trust account. In other words, if the deposit goes directly into the account of the builder, lawyer or notary, or developer, a Receipt of Funds Record does not have to be completed by a REALTOR® acting as the buyer's agent.
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