Deposit Bonds

If you are purchasing a residential property and do not have the cash immediately available for a 10% deposit, or you would prefer to leave you cash invested elsewhere, then a deposit bond is your answer. A deposit bond is a guarantee to the vendor, by an insurance company, that they will receive their 10% deposit, even if the purchaser defaults on the contract of sale. You, the purchaser, are able to provide this guarantee to the vendor by paying a small premium to the insurance company.

Upon settlement of the purchase, you, the purchaser, are still required to pay the full purchase price of the property, including the 10% deposit. The purpose of a deposit bond is not to pay the deposit but to guarantee to the vendor that it will be paid. If a purchaser reneges on the contract of sale and is still required to pay the deposit, the vendor can claim the money from the insurance company who issued the deposit bond. The insurance company will then recover the money from the purchaser.

We offer short term deposit bonds for settlement periods up to 6 months and long term deposit bonds for settlement periods between 6 and 48 months. Long term deposit bonds are generally used for the purchase of off the plan properties.

For more information please contact Moshav Financial office 1300 766 612.