WHAT ARE DEPOSIT BONDS?

A Deposit bond is a substitute for the 10% cash deposit that is required when purchasing a property. A Deposit Access Deposit bond is a guarantee from QBE Insurance, to a vendor for the amount of the Deposit required under a Contract of Sale.

By using a Deposit bond instead of cash, the amount of the deposit is retained by the purchaser until settlement. There is no need for the purchaser to withdraw the cash required from other investments or out of equity in other property assets, so their money is left working for them.

The cost of a Deposit bond is cheaper than other financing alternatives and the process of applying is quick and simple. Using a Deposit bond is a convenient and cost-effective way to exchange on a property.

The guarantee is provided by QBE to the vendor on the understanding that the purchaser will pay the vendor the Deposit bond amount on the settlement date of the contract. When applying for a Deposit bond, the purchaser will sign a counter indemnity agreement to confirm this. Under the counter indemnity agreement, the purchaser gives a legally binding right to QBE to pursue recovery against the purchaser for any part of the Deposit bond amount that QBE pays the vendor, if the purchaser defaults under the contract of sale.