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FAQ - Real Estate Agents
Do I have to accept a deposit guarantee?
The only person who has the authority to accept or deny a request for a purchaser to use a deposit guarantee is the vendor. The vendor has sole discretion to use the guarantee.
Do I need to amend the contract of sale if a deposit guarantee is used?
It is suggested that a special condition be annexed to the standard contract of sale when a guarantee is being used (not required with standard NSW contract of sale of land). This suggested condition enables the guarantee to be substituted for the cash deposit and requires the purchaser to pay the full purchase price including the deposit represented by the guarantee at settlement. The wording of this condition is included on the reverse of the guarantee certificate.
Can the guarantee be used at auctions?
Yes. The guarantee can be very useful for purchasers wanting to bid at an auction as it can be difficult for them to organise a cash deposit beforehand, particularly when they are not sure if their bid will be successful. The guarantee can be issued prior to the auction so you can gain the vendor’s acceptance of a deposit bond beforehand. The vendor and property details on the guarantee certificate will be left blank and the purchaser is authorised to complete these details if they are the successful bidder. As mentioned above, the suggested special condition on the reverse of the guarantee certificate should be inserted into the contract when signed on the day of the auction.
What happens if the purchaser defaults under the contract of sale?
If the purchaser defaults under the contract of sale and the vendor is entitled to retain the deposit, the vendor can claim the guarantee amount from the deposit bond issuer. This amount will be paid to the stakeholder nominated in the contract within two clear days of the deposit bond issuer being provided with the necessary documents (detailed on the guarantee certificate).
When does the guarantee terminate?
The deposit guarantee ceases when the contract of sale is completed, terminated, rescinded or the expiry date occurs, whichever happens first. If the contract is forfeited by the purchaser, the guarantee terminates when the claim is paid by the guarantor.
How do I arrange a deposit bond for a purchaser?
The simplicity of using a guarantee is one of its main attractions. Complete our online deposit bond application, the guarantee will normally be issued within 24 hours. What do I do if the vendor, purchaser or I need more information?
Should you, or any of your clients, have any questions about the guarantee or the application process simply call Iden Money on 1300 334 336.
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