The product is suitable for virtually anyone contemplating the purchase of a residential property including:
-
future home buyers;
-
home owners upgrading to a new property;
-
investors wishing to purchase property or additional properties;
-
owners or investors wishing to purchase properties off the plan.
The product is especially convenient for investors who may have funds tied up in non-liquid assets and who wish to purchase properties when opportunities arise. Finding the 5% or 10% required to enter into a contract on another property may be difficult when investment opportunities arise at short notice. Arranging bank finance or short-term loans may take time and associated costs may be high.
In addition, Deposit Bonds are extremely convenient for older couples who are looking to purchase a property off the plan now in anticipation of having to settle the transaction in one or two years time when the project is due for completion. The preferred option for people in this situation is to sell their house, say six months before settlement is due, however having to raise a large deposit at the present time when contracts have to be exchanged may create an unnecessary financial burden for them. The Deposit Bond allows such purchasers to enter into the transaction and retain their current property until it is more convenient to sell the property and settle the future purchase.