A deposit bond is a written guarantee which can cover a buying party for the deposit on the purchase of property. Deposit bonds are alternatives to cash deposits. The purchase price is still paid on settlement by normal means (i.e. cash or loan).
Deposit bonds are typically used when a party is borrowing 100% of their funds, such as:
They can be issued for up to 10% of the purchase price (i.e. $50,000 if the property price is $500,000). However it is possible for a Conveyancer from HLC to negotiate a lower deposit percentage, meaning we may be able to reduce the cost of the bond if the alteration is accepted by the vendor.
It is possible to utilise a deposit bond for many types of property transactions, predominantly:
Deposit bonds may also be used in the more rare property transactions, such as buying businesses or retirement villages. Deposit bonds can be compatible with both private treaty and auction sales.
Hunter Legal & Conveyancing offer a service to assist people acquire a property using a deposit bond and are partnered with reputable bond providers. This is best to take place after a verbal offer on a property has been accepted, but before contracts have been exchanged. An offer must be accepted before a bond will be issued.
Our team of expert Conveyancers will then assist you with the remainder of the Conveyancing process and make it a breeze.
For more detailed information read our article on A Beginner’s Guide to Deposit Bonds.
When you first call
Firstly, please phone us on 1300 224 828, we can provide a fixed quote over the phone, and schedule a meeting. Please note, we have a mobile service throughout the Hunter, and can also perform this service digitally.
In the event a person requires a deposit bond,
we will verify your financial circumstances (i.e. waiting on funding).
We will then compile the paperwork so we can obtain pre-approval for the deposit bond, allowing us to easily process the remainder of the application when necessary.
Our first meeting
We will perform a verification of identity. Please bring your driver’s license and a birth certificate or passport, as well as a Medicare card.
In the event you are unable to meet us face to face, you can also perform a verification of identity at a local Australia Post branch – which will automatically send your verification into our software portal.
During the first meeting, we will review the contract of sale for the respective property, obtain financial details, loan approvals as well as any other items we require and sign relevant documentation.
What we’ll do
After the first meeting, we will submit the application and relevant documentation to Deposit Assure.
The deposit bond will be issued 24 hours later (subject to the status of your finance approval).
We will then assist with the remainder of the Conveyancing process, which usually takes between 4-6 weeks.
To acquire a deposit bond, a party must satisfy eligibility criteria with the bond provider (which is usually approved finance or the sale of the property before a deposit bond is issued).
In a typical circumstance, a party would first contact a bank or mortgage broker and complete an assessment process with the lender.
As the party most likely does not have a cash deposit, the loan will probably be assessed with other assets, such as funds coming from the sale of another property.
HLC can then assist our clients with the bond application.
In our experience, no, they are happy with either cash or bond. Bond providers are usually owned by large organisations (i.e. QBE Insurance Australia own Deposit Assure). So utilising a deposit bond provides a sense of security to the vendor that the sale will finalise.
By default, they are valid for three months. Though in some circumstances, we would request it so it matches the term of the contract.
For example, for off the plan purchases that will be constructed in two years, we would request the bond to be valid for two years, so the bond doesn’t need to be renewed and corresponds with the sunset clause in the contract of sale.
Yes, in this electronic age we can assist you as this is a fully digital service.
At Hunter Legal and Conveyancing, we’re real people who talk plain language. Our solicitors and conveyancers listen, are compassionate and help you to take it one step at a time. We pride ourselves on our communication and friendly and personable staff who are here to meet all your legal needs.
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