What if the Vendor won’t Accept a Deposit Bond?

Mortgage brokers understand the challenges their clients face when navigating the sale of an existing property while purchasing a new one. One common hurdle is managing the buy and sell timeline where settlement and purchase dates don’t necessarily align. Then there’s the potential issue that buyers don’t have actual ‘cash’ on hand for deposits. In this article, we introduce an alternative approach to handling deposits. 

Most brokers have a good understanding of how deposit bonds work. Also known as deposit guarantees, they act much like an insurance policy that guarantees the buyer will pay the deposit at settlement. If you're unfamiliar with deposit bonds, here's a brief overview:

Rather than providing a cash deposit upfront to secure a new home, a deposit bond allows the buyer to utilise the bond as a payment method for the deposit — which can be up to 10% of the purchase price. No actual money changes hands until the settlement date, at which point the full purchase price is paid and the bond becomes void. However, what happens when the vendor refuses to accept a deposit bond? After all, the vendor may need that deposit for themselves so they can secure their next purchase. In these situations, the availability of an alternative solution becomes crucial. 

Property Credit is the latest contender shaking up property fintech and offers a compelling solution to the reliance on deposit bonds. Providing homeowners with access to their home's equity, Property Credit provides real cash for the deposit instead of a potentially rejected bond note. This alternative ensures that the vendor's concerns are alleviated, as they receive the deposit payment in the form of cash.

Beyond just the deposit, Property Credit also provides funding opportunities throughout the entire property transaction process, streamlining the experience from start to finish. This means that as the sale progresses, clients can take advantage of additional funding options to service any number of cash-flow requirements. Much like having a financial safety net, Property Credit’s loan facility can cover various expenses for homeowners, such as pre-sale improvements and advertising. 

Once approved, clients can access their equity through Property Credit's structured facility. Drawing as little or as much as they need during the property sale, clients only pay for the amount utilised without any line fees and nothing due until settlement. 

So now brokers can add this to their tool kit when assisting clients with their loans. Best of all, your client can access bridging finance fast (within 24 hours) with a simple, fuss-free application process requiring minimal documentation. 

Interestingly, real estate agents also recommend Property Credit to help their clients. By utilising equity, owners can cover the expenses of the sale process which make the agent’s job even easier. You too can join Property Credit's network of partners, by signing up for free on their website. Instead of waiting and potentially missing out on income, why not be proactive and take advantage of this service beforehand? Once your application is complete, you'll gain access to a portal that offers instant quotes, deal submissions, tracking and more.