Seeff Properties has recently introduced into its Sale Agreement, an option for purchasers, as an alternative to a cash deposit.   

“This is not a loan or bridging finance,” says Ian Slot, member of Seeff’s National Board and Legal Sub-Committee.    “It is simply a more cost effective option for purchasers than putting their cash into trust and it appears to be as secure for sellers as a cash deposit would be.”

The product is a Deposit Guarantee issued by Deposit Advantage, a division of Lombard Insurance Group, a member of the Hollard Group and payable by Lombard on demand.

“The product is intended for the LSM 9-11 market” explains Antony Solomon of Deposit Advantage describing the product as “the most cost effective way of funding your deposit, more so than by putting your own cash in.”   Solomon states that for this reason, it is currently being used in 25% of all transactions in Australia’s state of New South Wales where it originated before spreading to Europe and America.

“It is cost effective on traditional sales”, says Slot, “but the product really comes into its own on off plan developments where the deposit can be sitting in trust for 12-18 months or longer.” 

Explaining why Seeff has included this option into its own Offer to Purchase documents, Slot says, “The majority of transactions will still take place with cash deposits.  However, as we have always marketed Seeff as the intelligent buyer and seller’s choice, we have always looked to sourcing products and service providers who can facilitate deals, for example, loan originators OOBA, bridging finance providers RODEL and international currency traders like Currencies Direct, who can make up to a 3% difference on purchase price and proceeds received from sales for foreign buyers and sellers - on the currency conversions rates alone.  And now we introduce Deposit Advantage, which will make buying a property cheaper, without compromising the seller’s security.”

Solomon adds that, “In addition to adopting the product for its cost-effectiveness, the other reason it is attractive to clients is for pure convenience – for example, those who have their funds tied up in a fixed deposit or shares portfolio or for those who have sold their property but not yet received the proceeds.”