Deposit Bonds and Bank Guarantees
Benefits of a Deposit Bond or Bank Guarantee for the Purchaser;
The main purpose of a Deposit Bond is to enable the Purchaser (you) to provide to the Vendor (Seller) a Guarantee that the deposit amount (usually 10%) will be paid at settlement. This is ideal for long settlements or "off the plan" purchasers which take up to 2 years to be completed.
The alternative to the above Deposit Bond is a Bank Guarantee, however rather than paying a once only premium with a Deposit Bond based on the amount and term a Bank Guarantee can be an option depending on your circumstances.
Additionally, a Bank Guarantee requires security which is usually covered against adequate equity in any existing property you may have or against a Term Deposit.
Other benefits included for both these options which may depend on your circumstances are;
- You don't need to go to the expanse and time delay in arranging bridging finance.
- Convenience when purchasing property.
- It's inexpensive and quick (usually within 24 hours of loan approval). When property is selected, signing of contract can be immediate.
Should you wish to discuss these options further please contact us.