A deposit bond is a certificate that can be used in place of the cash deposit the purchaser needs to pay when signing a contract of sale. It acts as a guarantee of the deposit payment. At settlement, the purchaser simply pays the full purchase price.
Deposit bonds are also known as a deposit guarantees.
They are widely accepted and trusted throughout Australia as a means of securing a property purchase. In fact, Deposit Power has helped over one million buyers and sellers in the property sale process. Deposit bonds are legal in every state and territory across Australia and can be issued for all or part of the deposit amount required, up to 10% of the purchase price.
Deposit bonds can be issued to secure most types of properties with settlement terms to match the needs of the purchaser. Most property purchases settle within 6 months or sooner but there are many other situations that require a longer settlement term, such as properties under construction and off-the-plan purchases.
They are economical with only a one-off fee required. There are no ongoing fees or interest charges. The fee varies depending on the term of the deposit bond and the amount required.
The fee for a short-term deposit bond is only 1.3% of the deposit bond amount. So, the fee for a deposit bond of $50,000 will only be $650.
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Deposit bonds are a great alternative to a cash deposit when:
A deposit bond is a perfect alternative when buying your first home but do not have access to the full cash deposit when entering into a purchasing contract. A deposit bond can also assist those who cannot access a government grant, due to it not being available until after settlement.
Deposit bonds can be used to purchase both residential and commercial property. A deposit bond is a useful tool for investors who want to defer the payment of their cash deposit, particularly when your LVR is between 70% to 100%.
Deposit bonds can be used as a substitute for your cash deposit when purchasing a new home including registered or unregistered land packages.
Commercial or business properties such as units, retail, office, storage space, commercially zoned vacant land, individual factory units or general business premises can be bought using deposit bonds.
Self-Managed Super Funds can use deposit bonds to purchase investment properties.
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Deposit bond issued
Once a referral is submitted, Deposit Power will contact the customer directly to facilitate the Deposit Guarantee.