Short Term – up to 6 months until settlement

Short Term Deposit Guarantees are used for settlement term of up to six months and are ideal for property purchasers buying at both auction and private treaty.

To qualify for a Short Term Deposit Guarantee you need to be able to show us that you have sufficient funds to complete the property purchase at settlement. The information required to do this will vary depending on individual circumstances, the property being purchased and the term. For example, requested information may include:

  • A loan approval
  • A copy of the contract of the property being purchased
  • Funds accessible prior to the completion date, such as savings, a fixed term deposit, or share certificates
  • Evidence of equity in an existing property
  • Evidence of other funds that will assist in the purchase such as the First Home Owners Grant
  • Your solicitor or conveyancers details


Short Term Buying Options


Private Treaty Purchase (Offer & Acceptance)

Buying by the private treaty offer and acceptance method is the most common type of transaction. This is where the purchase price is negotiated before signing a contract of sale. A Deposit Power Guarantee is ideal in these situations and is issued for any amount up to 10% of the purchase price. The Deposit Guarantee then represents your deposit until settlement, at which time the full purchase price is paid.

The following demonstrates how a Deposit Power Deposit Guarantee fits into the typical private treaty buying process:

  • Identify property to be purchased and negotiate price with agent/seller
  • Ensure sufficient purchase funds will be available for contract completion (finance approved, existing funds to be available, sale of current property)
  • Apply for a Deposit Power Guarantee
  • Deposit Power Guarantee issued
  • Sign contract and include deposit guarantee details in the contract
  • Deposit Power Guarantee given to contract Stakeholder (usually the real estate agent or sellers solicitor) as deposit commitment
  • Contracts exchanged (NSW only)
  • Settlement occurs with full purchase price being paid, including the deposit amount
  • Deposit Power Guarantee expires at settlement


Buying at Auction

Deposit Guarantees are very convenient for buyers attending auctions.  When buying at auction, the purchase price is not known until the fall of the hammer, therefore it is important to have flexibility with the deposit.

Deposit Power can provide this flexibility with a Deposit Guarantee for an amount up to 10% of the maximum bid. An auction Deposit Guarantee is non-specific to a property. If the buyer is successful at auction, the details including the property address, price and vendor details are entered onto the Deposit Guarantee Certificate, making it a seamless and simple process. Therefore if the final purchase price is higher or lower than expected, the guarantee remains valid for 10% of the purchase price up to the maximum guaranteed amount.

Auction guarantees are issued for a term of 6 months therefore providing the purchaser with flexibility to attend numerous auctions with the same Deposit Guarantee until they are successful. The Auction guarantee offers the flexibility to be used to negotiate a price before auction or following, if the property fails to sell at auction. The Auction Deposit Guarantee can also be used to purchase a property by Private Treaty, which provides maximum flexibility and convenience to the buyers. The only proviso is that settlement must occur before the expiry date of the Deposit Guarantee, which is shown on the Deposit Guarantee Certificate.

The following demonstrates how a Deposit Power Deposit Guarantee fits into the typical buying at auction process:

  • Ensure sufficient purchase funds will be available for contract completion (e.g. finance approved, existing funds to be available, sale of current property)
  • Identify property to be purchased and determine maximum bid based on your financial position
  • Obtain confirmation from the sellers agent that a deposit guarantee is acceptable in lieu of a cash deposit
  • Apply for Deposit Power Guarantee
  • Deposit Power Guarantee issued
  • Bid at auction up to the maximum amount and capacity to complete the purchase. If unsuccessful at auction, the process can be repeated as the guarantee remains valid for 6 months
  • If successful, sign contract and include the deposit guarantee details in the contract
  • Deposit Power Guarantee is given to the deposit Stakeholder as the deposit commitment under the contract in lieu of a cash deposit
  • Settlement occurs with full purchase price paid, including the deposit amount
  • Deposit Power Guarantee expires at settlement


Undecided

If you’ve not yet determined if your intention is to buy at auction or by private treaty then applying for an Auction Deposit Guarantee is your best approach as the Auction Deposit Guarantee can be used to purchase a property by Auction or Private Treaty, which provides maximum flexibility and usability for the property buyers.

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