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Deposit Bonds |
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What is a deposit bond?A deposit bond acts as a substitute for the cash deposit between signing a contract and settlement of the property. At settlement the purchaser is required to pay the full purchase price including the deposit. The Deposit Bond does not remove the obligation of the purchaser to pay the full deposit upon settlement.
The Deposit Bond can be issued for all or part of the deposit amount required, up to 10% of the purchase price. Acceptance of the Deposit Bond in lieu of a cash deposit is at the sole discretion of the vendor.
Why use it?Quick & EasyA Deposit Bond can usually be organized within 24 hours.
Alternative to Short Term FinanceFor many people, short term finance is costly and time consuming involving additional application fees, high interest rates and delays in processing. A Deposit Bond can usually be arranged much quicker and for less cost than bridging finance loans.
Economical - one fee, no interestThe cost savings could be considerable. For example, the fee for a $30,000 Short Term Guarantee is $360. Short term finance may cost you $727 based on an application fee of $450 (often 1.5% of the borrowed amount), plus interest payable of $277 (assuming an 8% interest rate over six weeks).
By using a Deposit Power Guarantee, you have saved $367.
Flexible for AuctionsDeposit Bonds are ideal for auctions. A Deposit Bond is issued prior to auction so that the purchaser can gain the vendor's acceptance of the Guarantee beforehand.
The property and vendor's particulars are left blank and the purchaser is authorised to complete these details if they are the successful bidders.
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