Putting a large deposit down on a property comes with its own financial stresses. Making matters worse is a long wait period, forcing you to leave your money in an account for potentially months. This creates a sense of anxiety and panic in some, and it leaves others frustrated. You go without your new home and your money for so long, after all. Many people in this situation have a simple question – will the brokerage pay interest on the deposit? That is something they have to do, right? Well, not always. There is more to this than the brokerage paying interest simply because they have your deposit at the moment.
Not All Accounts are Equal
A brokerage will hold your money in a trust. This trust may or may not generate interest, depending on the type of trust. Some do generate interest over the period of time it is in the trust, while others will not. If you have already signed the agreement, you should look at it to see the type of trust it is. You can ask your real estate agent for any information on the matter, too. This will help you to understand what you can expect from the trust and over the time your money is in it.
You can request that your money goes into a trust that generates interest. If you have yet to sign the agreement, you and the seller can agree to put the deposit into an account that will generate interest. This has to be an agreement between the two of you, speaking with the brokerage to understand all of the facts on the matter.
Collecting interest on an account is not as simple as you might think. While you would assume that it collects interest just by being in the trust, there are some other things to keep in mind. How the account collects interest and the amount are two important factors here. To understand fully what will happen with your deposit and the trust, speak at length with your real estate professional. This will make sure that you know what will happen with your money. You can also look at your agreement to see the information in full. Everything you need to know is available to you.
Do not forget to ask questions and look into everything involved with this situation. To protect yourself and to make the right choices, you should have all of the information necessary.