How do I pay a 10% deposit at auction when I don't have that amount?

October 15, 2014
Richard Ferguson

With many first home buyers already struggling with saving a deposit and then finding an affordable home, one further hurdle can be finding the 10% deposit required at most auctions. So what if you simply do not have access to this amount? Does it mean that you should not even consider a property that is to be auctioned?

Often a first home buyer will only have savings equivalent to 5% of the property price, so what can be done where a normal auction contract required you to put down 10% of the price at the fall of the hammer?


Many of the conditions in a contract can be amended subject to negotiation prior to the auction. This includes amending the required auction deposit to 5%. The selling agent should be happy to pass any such request on to the vendor – if not, use your conveyancer/solicitor to make the request.

Make sure that any agreed changes are actually reflected in the final contract before you sign it.

Parents and Friends.

If you cannot come to an agreement on 5% then maybe it’s time to ring around family and friends. You might find that one of them is prepared to lend you the remaining 5% - remember it is only for a short time (six weeks is the standard in NSW) before your finance kicks in and you can return their money (with interest ! or a good bottle of wine!)

Deposit Bonds.

If neither of these are working for you – don’t give up. We can always help you secure a deposit bond.

A deposit bond is a short term insurance policy which is lodged at the auction instead of cash. It simply sits there to secure the property until your home loan kicks in at settlement.

If you want to find out more about a Deposit Bond and how to get one, call us on 9873 3990.

Posted in: Home loans

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