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The Exchange Bond

The Exchange Bond ® replaces a cash deposit when buying an apartment, providing a simpler and often quicker way of securing a purchase.

What is an exchange bond?

An Exchange Bond® is an alternative to making a cash payment when committing to buy a new Home.

An Exchange Bond® is an "insurance policy" which guarantees the full deposit amount to the Seller if the Buyer fails to complete the purchase having exchanged contracts.

The Buyer of the property is still liable for the full deposit amount if he fails to complete, but the debt is owed to the Exchange Insurance Company ("ExCo") rather than the Developer.

The Buyer pays a premium to the Exchange Insurance Company ("ExCo") for the Bond and the "beneficiary" of the policy (in the event of a default) is the Developer.

Why buyers should choose the Exchange Bond®

The Exchange Bond® is quite simply the easiest way to secure a property - be it a house or an apartment.
When a customer is buying a new property, it is not unusual for the exchange of contracts to take place several months before the transaction is completed. By using an Exchange Bond® they avoid having to put up cash that is normally required at exchange to secure their property.
The Exchange Bond® allows them to continue to have control and use of their money which would otherwise be lodged with the builder or solicitor on exchange of contracts. What's more if they are buying a new property off-plan, the developer may even reimburse them the premium paid to purchase the Exchange Bond® in the first place.
In normal circumstances an Exchange Bond® will be issued for a period of at least 3 months for existing properties and up to 4 years for new homes. Depending on location the Exchange Bond® can be used to purchase an overseas property.