Deposit Power is Australia’s leading Deposit Guarantee provider. Deposit Power issued the first Deposit Guarantee in the Australian market in 1989, and has assisted over 750,000 property purchases.
Deposit Power is part of Vero Insurance Limited, one of Australia’s largest and most successful intermediated general insurance companies.
What is it?
A Deposit Power Guarantee is a substitute for the cash deposit between signing a contract and settlement of the residental property sale. At settlement the purchaser pays the full purchase price including the deposit.
The Deposit Power Guarantee can be issued for all or part of the deposit amount required, up to 10% of the purchase price. Acceptance of the Deposit Power Guarantee in lieu of a cash deposit is at the sole discretion of the vendor.
The Deposit Power products available include:
- Short Term Guarantee - for settlement terms up to 6 months
- Long Term Guarantee - for purchase contracts where the Sunset Clause is between 6 and 48 months
Should the purchaser default under the contract of Sale/Offer and Acceptance, the vendor can claim the amount guaranteed from Vero Insurance Limited. Vero Insurance Limited will then seek to recover this amount from the purchaser.
Deposit Power Guarantees were introduced into the Australian market by Vero Insurance Limited (formerly Royal & SunAlliance Insurance Limited) in 1989 and are legally effective in all Australian States and Territories.
Why use it?
Cost effective and convenient
Sometimes you may not have ready access to the cash deposit required to secure a property or may prefer a more cost effective alternative to using your own cash.
This may happen when you:
- Have sold your current home but funds are not yet available for your deposit
- Are a first Home Buyer and don’t have the full 10% cash deposit required in cash
- Are an investor and the loan funds are not available until settlement
- Do not want to pay a penalty for breaking a fixed term investment or selling shares
- May want to attend one or more auctions without having to put aside funds for the deposit each time.
Quick & Easy
Deposit Power Guarantee can be organised either directly through Deposit Power or your lending institution. Most applications are processed within 24 hours.
Economical - one fee, no interest
The cost savings could be considerable. For example, the fee for a $30,000 Short Term Guarantee is $360. Short term finance may cost you $727 based on an application fee of $450 (often 1.5% of the borrowed amount), plus interest payable of $277 (assuming an 8% interest rate over six weeks).
By using a Deposit Power Guarantee, you have saved $367.
Flexible for Auctions
Deposit Power Guarantees are ideal for auctions. A Deposit Power Guarantee is issued prior to auction so that the purchaser can gain the vendor's acceptance of the Guarantee beforehand.
The property and vendor's particulars are left blank and the purchaser is authorised to complete these details if they are the successful bidders.
Guaranteed by Vero Insurance Limited
Deposit Power Guarantee is secure because payment is guaranteed by Vero Insurance Limited. The Guarantee cannot be cancelled where it has been relied upon to sign a contract.
How does it work?
Deposit Power can simplify the process of buying and selling your property. In many cases, vendors accepting the use of a deposit guarantee or bond by purchasers will secure a sale quickly, particularly in situations where people are looking to buy and sell at the same time.
The process for purchasers differs slightly depending on whether the purchase is a Private Treaty or Auction.
| Private Treaty (Non-Auction)
|
Auction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|