Deposit Bonds

[Property Invest]

From: Property Investor


Hi Everyone,

I need to understand how deposit bonds work.
I'll provide an example:
I'm buying a property Off the Plan for 270k.
Agent requires $1000 to register.
14 days is given to obtain a deposit bond or cash deposit of 10%.
Completion expected is 2 years with a clause in the contract of 3 years just in case.
Now I have plenty of cash which I wish to use towards another property.
How much will a deposit bond cost me?
When will the 10% be paid and by who?
How long can I get deposit bond for?
Will the Agent or Developer actually get 10% in cash or will they be ok just with a deposit bond?

Do you know a good place where to obtain a deposit bond?

If someone could help me it would be greatly appreciated as I will be making a move on this property in a couple of days.

Thanks,
Mannie.

 

[WebBoard]

Reply: 1
From: Joo Joo


>How much will a deposit bond
>cost me?
>When will the 10% be paid and
>by who?
>How long can I get deposit
>bond for?
>Will the Agent or Developer
>actually get 10% in cash or
>will they be ok just with a
>deposit bond?
>
>Do you know a good place where
>to obtain a deposit bond?
>

>
>Thanks,
>Mannie.

Hi mannie,

here is a novice reply.....
Basically a deposit bond is like a cheque, it is a piece of paper guaranteeing that you have access or are approved for the 10%, without actually handing over the money.
This way the 10% is kept in a trust fund and you do not have to pay it off until settlement.

They usually cost about $200-300, you get these from a bank or any other financial institution and they vary between organisation in regards to how long they last for, I know Westpac one's only last for 6 months.

are you getting a loan for this property or are you paying cash?


regards
joo joo

 

[WebBoard]

Reply: 2
From: Peta McIntosh


Visit the following website to answer all your questions and legal requirements. There is also a premium calculator for the bond - just put in the 10% and the timeframe, i.e. 24 or 36 months and it will calculate the amount payable.

"depositbondsonline.com.au"

 

[Property Invest]

Reply: 2.1
From: Property Investor


You guys are fantastic!

Thanks for the help.
Much Appreciated.

Mannie.