Hi, Would it be possible to use a deposit bond as the deposit on a property purchase,
But instead of the bank and deposit bond money being paid out on settlement only the bank pays the money on settlement and then the vendor collects the remaining deposit bond money in 6 months.The property would be in my name on the day the bank pays the bulk of the purchase price, then the vendor would wait 6 months and then he would get paid the remaining amount from the deposit bond.
Is this possible to do?
I doubt you would find a bond issuer who would go past settlement date.
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
They are really strict on rules for deposit bonds.Was really unimpressed when I tried to apply.
Hi Keiko,
The deposit bond never actually gets paid – unless you do not have the funds (ie deposit) to complete the sale – then they come after you for that money. It sounds like you need to make arrangements for some of the purchase price to be deferred rather than what you mention with a deposit bond. Usually deposit bonds are only used (as in purchased – not 'cashed in') in cases where the purchaser does not have sufficient funds for the 5/10/20 % deposit but will have so on settlement. What you refer to as 'the deposit bond money' comes from yourself or the bank – it is like a IOU/promissory note but with a guarantee that if you dont come up with the dough – the deposit bond company (such as Deposit Power) pay the deposit, you forfeit the deal, vendor keeps the deposit, and they come after you. If I have misunderstood your question feel free to clarify.
CheersThanks everyone, I did some more google research and found the deposit bond will not be usefull to me in this deal.
Thanks
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