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How deposit bonds benefit property sellers & vendors
What is a deposit bond for sellers and vendors?
What it isn’t
- A home loan
- A bank guarantee
- Expensive
- Full of red tape
What it is
- A deposit guarantee
- Secure as cash
- Legal and trusted
- Widely accepted
Selling a property isn’t always straightforward. There’s the challenge of dealing with uncertain buyers, and then there’s the stress of settling on time. Getting a solid and reliable deposit is another major worry, since so many buyers are juggling their finances.
That’s where deposit bonds can help.
As a secure, legally binding guarantee, a deposit bond gives you the peace of mind that you’re covered no matter what happens. This means you can attract serious buyers who are ready to go – making the whole process a lot smoother.
It’s that simple.
How does the property transaction deposit process work?
When a property is sold, the buyer is required to pay a deposit upon the exchange of contracts. Once both parties have signed, the deposit is usually paid to the seller’s real estate agent or solicitor, who holds it in a trust account until settlement. It acts as a show of commitment from the buyer and helps to lock in the sale.
Instead of a cash deposit, buyers can also use a deposit bond from Deposit Power to secure the property. It works as a guarantee that the deposit will be paid at settlement, making the whole process easy and hassle free.
Benefits of deposit bonds when selling property
Attracts more buyers
By accepting deposit bonds, you’re opening the door to a wider pool of buyers. Whether it’s first home buyers who need time to organise their cash deposit, or upsizers who haven’t yet sold their current home, deposit bonds are perfect for any situation. You’ll increase your chances of finding the right buyer, faster.
Can lead to a higher sale price
More buyers means more competition, which is great news for your bottom line. With more people in the mix, especially at auction, your vendor property has a better chance of achieving a higher sale price. A deposit bond can be the difference between a quiet campaign and one that really takes off.
No need to worry about buyers sourcing cash
Buyers don’t always have cash on hand, and delays in transferring funds or selling assets can slow things down. When a buyer uses a deposit bond, there’s no need to stress about them pulling together the deposit. You’ll know their commitment is genuine, and your sale can move ahead without unnecessary delays.
Legally binding
Deposit bonds aren’t just a promise – they’re a legally binding guarantee that the deposit will be paid at settlement. That gives you real confidence as a seller, knowing that your vendor property is backed by a secure financial commitment.
Backed by a trusted provider
Deposit Power is backed by HDI Global Specialty SE, an international insurer with an AA– (Very Strong) rating. This is the highest credit rating for deposit bonds in Australia. When you accept our deposit bonds, you can trust it’s coming from a reputable source.
What the sale process looks like with a deposit bond
When the buyer uses a deposit bond, there’s no need to chase funds or wait on bank transfers. Everything’s handled quickly, and the deposit bond acts as a legally binding guarantee that the deposit will be paid at settlement.
Here’s what the sale process looks like when a deposit bond is used:
1. Buy presents the deposit bond
At the time of signing the contract, the buyer provides a deposit bond instead of transferring a cash deposit.
2. Bond verification
The digital deposit bond includes a secure QR code so your solicitor or agent can instantly verify its authenticity.
3. Contract proceeds as normal
The contract of sale is exchanged as usual, with the deposit bond held in place of cash. This means you’re fully protected – just as if the buyer had paid the deposit in cash.
4. Full payment at settlement
At settlement, the buyer pays the full purchase price (including the deposit amount). If the buyer defaults, Deposit Power guarantees the deposit payment.
It’s that simple. No extra steps, no extra admin and no compromise on security.
Addressing common questions about deposit bonds from buyers and sellers
What are the risks of a deposit bond for sellers?
Deposit bonds from Deposit Power are legally enforceable agreements. We’re backed by a major international insurer with an AA- (Very Strong) credit rating, so you can feel confident our deposit bonds are secure and reliable.
In the rare event that a buyer defaults on the contract, you’re still protected. Deposit Power will honour the bond and pay the deposit amount directly to you, ensuring you’re not left out of pocket. The process is clear, fast and dependable.
Do vendors accept deposit bonds?
Yes, many vendors and agents across Australia accept deposit bonds. As more buyers use deposit bonds to secure property, property sellers are becoming increasingly familiar with how they work and the benefits they offer.
Of course, as the vendor, you have the right to decide whether to accept a deposit bond or request a traditional cash deposit. However, more sellers are choosing to accept deposit bonds because they help attract serious, financially qualified buyers without any extra hassle. With a legally binding deposit bond in place, you can move forward with confidence.
Addressing common real estate agent and vendor concerns
If you’re new to the concept of deposit bonds, it’s normal to have some doubt. Here, we’ll look at some common concerns for property sellers, and explain why Deposit Power is highly trustworthy:
"A deposit bond means the buyer has no money"
Many buyers use deposit bonds because their funds are tied up in another property or investment – not because they lack the means to pay.
A deposit bond allows them to move quickly without needing to liquidate assets or take out short-term finance.
It’s a smart cash flow solution, not a red flag.
"They’re not as secure as a bank transfer"
Deposit bonds from Deposit Power are legally binding and backed by an AA- rated insurer.
If a buyer defaults, you’re still protected, because the bond provider is legally obligated to pay the deposit amount.
So you can enjoy the same peace of mind you’d have with a cash deposit.
"They’re complicated to deal with"
From the seller’s side, accepting a deposit bond is no more complex than accepting a cash deposit.
There’s minimal admin involved, and the bond is presented just like proof of payment when contracts are exchanged.
It’s a smooth process for everyone.
Vendor and seller FAQs
Is a deposit bond as good as cash?
Yes. A deposit bond is a legally binding guarantee that acts just like cash for the deposit.
It gives you the same protection and peace of mind, without the buyer needing to provide funds upfront
Can I still access my deposit if the buyer uses a deposit bond?
Just like with a cash deposit held in trust, you can’t access the funds (or bond value) until settlement.
However, a deposit bond gives you the same legal protection if the buyer defaults.
What protection does a deposit bond offer vendors?
A deposit bond offers vendors the same legal protection as a cash deposit.
If the buyer defaults on the contract, the bond can be claimed for the full deposit amount.
With Deposit Power, you’re backed by a highly reputable insurer, giving you additional peace of mind.
Are deposit bonds only for certain property types?
Deposit bonds can be used for a wide range of property types.
Whether you’re selling residential, off-the-plan, or even some commercial properties, a deposit bond is often a suitable option.
Learn more about deposit bonds for vendors
Deposit Power is a trusted Australian company with over 30 years of experience. Our deposit bonds are widely accepted by real estate agents, solicitors, conveyancers and vendors across the country.
To find out more, please contact us on 1300 315 649 to talk to our customer success team. You can also download an info pack – which provides useful advice for property sellers and vendors.