All Topics / General Property / Deposit bond deals
Anyone done any delayed deposit bond deals on high growth properties and sold on settlement for the purposes of “quick cash” and if so how does it work? Do you take ownership and then sell or can you sell the property whilst waiting for it to be built if the market is booming? And if so, how does one sell something if it hasn’t settled?
Cheers for any thoughts
NudgeVery risky business Nudge,
With interest rates going up and more and more off-the-plan investors having their investment complete with their property valued for less than what they signed contracts for, I would say that this method should be avoided.
Also because the ‘boom’ is said to be over and property prices may be on the slow down stage.
Sorry, as for answering your questions.. I’m not sure exactly but to the best of my knowledge (I myself have an off-the-plan apartment) I think you wait until settlement (to allow maximum gains) then you transfer the title (on my contract I have my name “and/or nominee”) to the new buyer and part of his settlement is transferring the difference of what you paid for the place and what he is buying it for into your account. []
I’am sure that I may have missed something… So anyone else please add your views!!
Cheers
Eternity
Some of my clients have done this, and it has worked well in the past because of the high growth in recent years, but I agree that it would be very risky to consider this strategy now.
Basically all you have to do is find another buyer, and arrange a simulataneous settlement. So you do have to settle, but you immediately settle with the person that is buying from you. So you do not need finance. It can be hard to arrange sometimes as not everything always goes smoothly.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
nudged, this article might give you some info:
http://www.smh.com.au/text/articles/2003/09/26/1064083195675.htm
There are a number of articles on deposit bonds. I typed in “deposit bond off the plan apartment” into google.com (australian-only sites) and came up with a large variety of info
kay henry
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