 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Deposit Bonds
A Deposit Bond is a guarantee used instead of a cash deposit between signing contracts and settlement of the sale of a property. A Deposit Bond may be used for all or part of the deposit required up to 10% of the purchase price. It is a guarantee to the vendor by the issuer of the Deposit Bond.
Why use a deposit bond?
- So you can continue to save - there is no need to sell shares or mortgage assets
- Where you current home is sold, but funds are not yet available
- Cost-effective
- Replaces short-term finance
- Convenient when funds are tied up in investments, often earning a higher return than bank interest
- Convenient at auctions
What happens at settlement?
At settlement the buyer is required to pay the full purchase price including the deposit. If the buyer does not proceed with settlement, the vendor can claim the amount of the guarantee from the issuer of the Deposit Bond who then recovers this money from the buyer.
What is the cost?
There is a fee for the deposit bond which is determined by the amount of the guarantee and the length of time required. Please contact us for a quote.
When would you use a deposit bond?
To secure a house, unit, land with freehold, strata or leasehold title whether by private treaty, auction or off-plan.
How long is the deposit bond valid for?
Deposit bonds are available for a period of 3 months to 4 years. Long-term deposit bonds are used for off-the-plan purchases.
Deposit bonds expire at the expiry date or when the contract for sale is completed, terminated or withdrawn. If the buyer fails to settle, the deposit bond expires on payout of the deposit bond by the issuer.
How long does it take to organise a deposit bond?
Deposit bonds are generally approved within 24 hours.
Who is eligible?
Anyone who is purchasing residential property including existing property owners who wish to purchase property, investors who wish to expand their property portfolio and first home buyers.
A lo-doc deposit bond is also available; please contact us for further
details.
