Initial Deposit - Secure the fair chance
Many of us have the similar experience: we viewed the home, loved it and applied. we were praying to get approved soon and move into the dream home…. A few days later, we were being told another candidate had been chosen among many applicants because his/her application is stronger even he/she applied after you. Is there a better and fairer way to secure your dream home? Yes, there is. Welcome to the concept of “initial deposit”.
This post explains what is so-called “initial deposit”, how does it work, and why it actually works significantly better for the ones who want to “enjoy the home”, not just “rent another place”
The “initial deposit” is a “trust funding” being put in place ($500.00 for a home/suite) at the time when you complete the rental application form or right after.
Here is how it works – It is used to hold the property exclusively for you while the landlord/agent is processing your application. Once the application is approved, the total initial deposit shall go towards the first month rent; if not approved, the initial deposit will be refunded back to you after a deduction of $45.00 processing fee. However, if the application is being approved but you decide not to go ahead, then the initial deposit is not refundable.
One question often being asked is that what is the difference between the initial deposit and the “security deposit”? There are very different. In Alberta, the landlord/agent may require the full payment of the security deposit, which is normally equivalent to one month rents, only AFTER the rental application is being approved. The security deposit is regulated by the local tenancy laws, to which you may refer if needed.
Here are the 3 main reasons why the option of “initial deposit” works way better for the applicant instead of without:
First, initial deposit allows the home one loves to be held exclusively while the application is being processed, it secures one’s number 1 position based on the fair principle of “first come, first serve”.
Secondly, while the landlord/agent may still be able to show the home to other viewers, the rental home status has been changed from “available” to “pending”, which will actually help a lot of other applicants to save time and find some other places that are still available.
Last but not the least, while “cherry-picking” among many applicants does work to the landlord’s advantage, as the applicant, you can use the practice of “initial deposit” to predict/measure the level of professionalism and commitment of your “going-to-be-landlord”. The reason is simple – it takes more than money for the commitment in “genuinely” helping you get into your dream home, instead of simply renting a place to someone that is likely best qualified to pay the rents.
The first principle to build any kind of enduring and healthy relationship is to start it on the solid foundation of “mutual trust and commitment”. Being able to have the option to hold the dream home exclusively is just a great example of this principle in action – It works beautifully to connect the great applicants and landlords for the common goal – To share the home that we all care wholeheartedly.