The standard 10% deposit is usually payable when a contract is signed, but is often postponed for 3 to 7 days. Many purchasers of real estate mistakenly believe that the deposit will be paid by their lender. It later comes as a surprise for them to learn that the lender, having granted “pre-approval” for the home loan, will not pay any loan moneys until the loan has been unconditionally approved.
In the meantime the purchaser, having signed a contract that requires payment of the deposit within 7 days, is unable to find the funds required to cover the deposit. The result is that the purchaser is in breach of the contract for failing to pay the deposit by the due date. This, in turn, affects the purchasers right to rely on the finance condition in the contract, as the finance condition states that the purchaser must not be in breach of any other condition in the contract.
It is important that you discuss the payment of your deposit with us as soon as possible, to ensure that the lender you choose is able to assist. Alternatively, we can draft an appropriate condition and have it inserted into the purchase contract before you sign it.
NOTE: A deposit bond is NOT the same as a deposit, and cannot be used to pay the deposit unless the contract allows for the use of a deposit bond or the vendor agrees in writing to accept a deposit bond.