• Looking to purchase property for an investment or to occupy? 
• Need a more flexible alternative to paying an upfront cash deposit on your new property?

Firstfolio Deposit Bonds replace the need to use cash, bridging finance or a bank guarantee to fund the 10% deposit required for residential or commercial real estate purchases, which includes land and property.

• A more simplistic option.
• If your loan is approved by Firstfolio or one of Lawfund’s accredited lenders, then a ‘short term’ bond (six months and under), will be automatically approved.
• Bonds allow individuals to use their spare cash for more rewarding opportunities; trusts or superfunds can generate alternative higher returns; and businesses don’t tie up working capital.
• More cost effective.

• Individuals purchasing real estate for personal occupation or as an investment.
• A trust or private superfund.
• A business.

When an individual, trust, superfund or business buys a property they are required to pay an immediate deposit (usually 10%) of the purchase price to the vendor in order to exchange contracts.

Firstfolio Deposit Bonds, underwritten by major Australian insurance companies, guarantee to the vendor that payment of the deposit will be made at the time of settlement, as opposed to paying the deposit in cash when exchanging contracts.

The party buying the property is still required to pay the $ amount of the deposit as part of the final settlement, however, with a Deposit Bond, this $ amount is deferred until settlement date.

• Cost Savings - The funds that would normally have been used as an up front cash deposit can be used for alternative purposes with higher returns.
• Convenience – Parties purchasing a second or subsequent property (i.e., changing residence, an investment property, and business premises) may not have spare funds to outlay the 10% deposit when exchanging contracts. Firstfolio Deposit Bonds are a quick and convenient way to overcome this problem.
• Simple – The 10% deposit required may be locked away in a term deposit, shares or another property. It can be a costly and time consuming process to gain access to the funds to effect the exchange of contracts in time. Needing to free up the 10% deposit is avoided.
• Auctions - Firstfolio Deposit Bonds can be issued prior to auction, which means you do not have to worry about organising your deposit in a hurry or in advance. The Firstfolio Deposit Bond can be issued without the property particulars meaning that if you are unsuccessful at a particular auction, the bond remains ‘open’ and can still be used to secure another property at a subsequent auction.
• Refunds - Of course. If you do not use the bond and return it within 30 days of issue, you will receive a refund less an administrative fee of $110 (including GST).
• Peace of Mind - A Firstfolio Deposit Bond is secure because payment is guaranteed. The guarantee cannot be cancelled once the bond has been used to secure a property and contracts exchanged.

The cost varies with the $ amount of the deposit required and the number of months to settlement date. Firstfolio Deposit Bonds can be issued for short term (typically 6 weeks) or long term (up to 60 months).

Do I still have to pay the deposit at settlement?
Yes. The bond is a substitute for the cash deposit stated in the contract of sale. It does not remove your obligation to pay this deposit to the vendor at the settlement date. As stated above, using a Firstfolio Deposit Bond means that the full purchase price is paid at settlement, rather than the full purchase price less the initial cash deposit.

What happens if you don't go through with the purchase?
If you default under the contract of sale, the vendor can claim the deposit amount from the deposit bond guarantor (i.e., the insurance company). The guarantor will then seek to recover the deposit amount from you. Should this occur, please contact us immediately so we can assist you.

When does the Firstfolio Deposit Bond terminate?
The Firstfolio Deposit Bond terminates when:

- The contract of sale is completed
- When the guarantor pays a claim, or
- On the expiry date of the deposit bond.

For further information or assistance, please contact our experienced and friendly staff.

Phone: 1300 76 06 88
Fax: 1300 76 06 77