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What’s the qualifying criteria to access a Deposit Bond?
For terms up to 6 months, the applicants will either have finance already approved or are yet to organise finance.
For those with finance approved, it’s a simple application (short-form), plus provide a couple of support documents.
For those without finance approved, they either need to own Australian based real estate or have a family member that does, go as guarantor. The application is long-form and we require several more documents.
For Deposit Bonds above 6 months, especially ‘off the plan’ purchases, the criteria is similar to the previous paragraph.
Once approved and the bond fee has been paid, the Deposit Bond to released to the nominated party, typically the solicitor or conveyancer representing the applicant(s).
The Benefits for a Deposit Bond
If you are selling and buying at the same time, instead of applying for a bridging loan or waiting weeks for your loan to be approved, you can get a deposit bond very quickly. There is a one-off fee (with no ongoing fees or interest charges) and it often works out more economical than the fees and charges for a bridging loan.
You might be ready to buy but, don’t have your cash deposit readily available. Your cash might be tied up in a fixed-term deposit or other investments like shares, or you might be in the process of selling your home and need to wait for the money from the sale to buy your new property, or you might be waiting on a gift from family or an applicable government grant to make up the deposit amount.
You can get a deposit bond quickly & easily and it can be used instead of a cash deposit to secure your property.
Auctions are a popular way of marketing a property for sale.
If you plan on using a Deposit Bond at auction, you will need to apply for it prior to the auction. On the day of the auction, bring the Deposit Bond certificate along to the auction. When you secure the winning bid, simply complete the details of the purchase on the deposit bond certificate and hand it over to the real estate agent (instead of the cash deposit) to secure the property.
Often buyers might have to attend and bid at a few auctions before being successful. Rest assured that if you are unsuccessful at the first auction, you can use the Deposit Bond certificate at the next auction and hopefully, you will be the successful bidder then.
If you have found a property to buy and the seller has agreed on the price, you will have to sign the contract of sale (or offer & acceptance) and place a deposit (usually up to 10% of the property purchase price) with the real estate agent.
At this time, you will have to apply for a Deposit Bond. The application process is quick and easy. Then all you need to do is hand over the Deposit Bond certificate to secure the property.
