What is a Deposit Guarantee?

May 26, 2016
Nicholas Dennett

A Deposit Power Deposit Guarantee acts as a substitute for the cash deposit required by the purchaser between signing a contract of sale and settlement on a property. It acts as a guarantee of the deposit payment. At settlement the purchaser simply pays the full purchase price including the deposit.


Deposit Guarantees can sometimes be referred to as a Deposit Bond.

A Deposit Guarantee can be issued for all or part of the deposit amount required, up to 10% of the purchase price.

We understand that depending on negotiations between purchaser and vendor deposit amounts can vary anywhere between 1% up to 10% of the property purchase price. We also know that at other times a purchaser may want to split their deposit between cash and a Deposit Guarantee. A Deposit Power Deposit Guarantee is a quick and easy alternative to a cash deposit that is payable when signing a contract Deposit Guarantees can be a low cost alternative compared to other options such as overdrafts, bridging finance or breaking a fixed term investment.

Deposit Guarantees are very useful if you have cash tied up in other investments such as shares or a term deposit or are waiting on the settlement of an existing property. A Deposit Guarantee can often simplify the process of buying a property. For purchasers it provides a quick and convenient way of accessing a deposit without having to arrange other time consuming and expensive options such as bridging loans, the sale of shares or an equity release from existing property. The deposit guarantee simply takes the place of the cash deposit required in the contract. A guarantee certificate is produced which is held by the sellers’ representative until settlement (usually their solicitor or conveyancer). Click the link below to see Deposit Power’s short video about deposit Guarantee’s.

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