The deposit is the part of an offer that makes it credible. It is not a fee, it is not extra, and it is not the down payment. It is your down payment arriving early and becoming very hard to get back.
How much
Around five per cent of the purchase price is the common expectation in the GTA, though it is entirely negotiable. A larger deposit is one of the few ways to strengthen an offer without raising the price, because it is the clearest possible signal that you intend to close.
When
Typically within twenty-four hours of acceptance, by bank draft or wire to the listing brokerage. Some offers say "upon acceptance", which means effectively immediately. Have the funds liquid and accessible before you write an offer. A deposit you cannot deliver on time puts you in breach on day one.
Into the listing brokerage's real estate trust account, a regulated account separate from the brokerage's own money. Nobody can touch it until closing, when it is credited against the purchase price.
What happens if you walk
Your condition is not satisfied
You give notice within the condition period and the deal ends. Both parties sign a mutual release and the deposit comes back to you. This is what conditions are for and it is a clean, normal outcome.
You simply change your mind
You forfeit the deposit, and that may not be the end of it. A seller who resells for less can pursue you for the difference. Ontario has no cooling-off period on resale homes.
Even when you are plainly entitled to your deposit back, the brokerage can only release it on the written agreement of both parties or a court order. A seller who refuses to sign a mutual release can leave your money sitting in trust for months. It is rare, and it is worth knowing before you assume a returned deposit is automatic.