Thanks again. Your idea of ongoing increments for the non refundable deposit sounds good. I will certainly get my lawyer to write the contract once I have an in principle agreement with the developer.
The conditions he wants are that he gets DA approval from the council within 6 months with an extension of 2 months if required and settlement 60 days after that if DA approved. However he can pull out at anytime or go unconditional at any time. So he may be done and dusted in three or four months or walk away after 8 months or go unconditional after 8 moths and settlement 2 months later.
The money he has proposed is
$500 deposit
$5000 non refundable after 3 months
$9500 when unconditional (could be up to 8 months or never)
So the outcomes for me are
1. After 8 months he walks away. I then have to sell my property again and the market may be better or worse than now and I have carried the bridging loan interest until my house sells plus the running cost of the property, rates, water, repairs etc. which will be for a minimum of 10 months but realistically 14 months.
2. He takes the full 8 months to go unconditional and settlement 2 months later. I have carried the interest for 10 months plus running cost of the property, rates, water, repairs etc. for 10 months.
3. He settles in a fairly short time frame of 4 to 6 months and I have carried the interest and running costs for that period only.

If I can get him to pay 1% non refundable a month after 5 months he would have over 30K skin in the game plus his DA costs. This would be a disincentive to walk away. What do you think?
Cheers