What are the Possible Options for Home Deposit?

Have you finally found your dream home? Are you ready to sign the contract and make it yours? When it comes to buying a home, having a Property Conveyancing Lawyer Sydney by your side will ensure the process goes without a hitch.

Buying Property In Sydney

When buying a home, one of the most important steps is paying the 10% deposit. Are you ready to pay the deposit? Wait! First, see if the deposit is incorporated within your loan amount or are you paying it using the funds from the sale of your current property. Read the following options for your home deposit before paying it:

1. Try Persuading the seller to accept a smaller deposit.

This option is beneficial to the purchaser and risky for the seller because in the event of a default, the seller would not be able to recover the full ten per cent deposit from the buyer if he accepted less than normal deposit (i.e. 10 % of the sale price).

2. Obtain a deposit guarantee bond.

You can pay in a form of bond which can act as a substitute for a cash deposit. In case of the buyer being a default, the bond by an insurance company or bank can pay the deposit money to the seller. Remember, there are no “standard forms”. The seller needs to check for any time limits because if the buyer defaults and the time limit on the bond is expired, he would not be protected by the guarantee. Even the claim for money can be denied for it. Your only way out will be to sue the buyer which can run you out of time if the sale drags on.

The insurer will come looking for its money from you if you are the buyer of the bond and you default under the purchase contract.

Bond deposit is a quick, easy and cost-effective solution as long as the buyer and seller are familiar with the “fine print” and their conveyancer makes sure that the time limits are long enough for the transaction, before exchanging contracts.

3. Ask your buyer to release the deposit if you are selling your home to buy another, so you can apply it towards your purchase.

This can be risky for the buyer. Releasing a deposit is similar to making an interest-free loan to an unknown person.

4. Borrow the money or get someone else to pay it for you.

This is unlikely to happen unless you have a very close relation or are friends with the bank manager.

Get in touch with Conveyancing Sydney for all your real estate and property management concerns. We will guide you and help you out for a swift transaction. Call us at (02) 8084 2764.