Ever considered deposit bonds?

MPA hears from Deposit Assure co-founder, Etienne Rizzo on why brokers should be looking at deposit bonds and how to include it in their offering.

Co-founder of Deposit Assure, Etienne Rizzo made his mark in the graphic design and advertising industries and has managed high profile brands across a diverse range of categories for the last ten years, including Disneyland Resort Paris, Heinz and Medibank.

MPA: Why should brokers be interested in deposit bonds?
Etienne Rizzo:
Have you ever had a client you had to say ‘ No I can’t help you!?’ If you are like me you would like to help everyone and ‘No’ is a hard word to say. 

The reality is brokers will meet homebuyers who, for a number of reasons are unable to access a cash deposit to secure their new or next property purchase. They may also come across scenarios where it may be more convenient for their client’s to use a deposit bond to secure their property purchase over using a cash deposit, bank guarantee or personal loan.

Whatever the reason, if your client can benefit from deposit bond, brokers should start saying ‘yes’ I can help you. This will build trust and recognition with their clients in their ability to manage their client’s loan application (end-to-end). 

Brokers are in the business of closing deals, quickly and efficiently.  By having deposit bonds in your toolkit, it will allow you to close deals where it may not be otherwise possible.

Awareness about deposit bonds is extremely low.  Most homebuyers that approach us have heard of them through a broker. There are property buyers out there that may be holding back on making their first or next purchase, as they are unaware about how they work and the convenience they offer. Deposit bonds can give brokers an edge with access to new markets and opportunities. 

MPA: How can brokers include it in their offering? 
ER:
With awareness so low as mentioned before, we encourage brokers to educate their clients during their initial assessment. It will be quite clear to the broker when their clients may have difficulty coming up with the cash deposit required. It is at this point that they should look at recommending deposit bonds as a feasible and cost effective solution for their clients.

Deposit bonds are an incredible aid when you have:
  • a client buying with the help of a family guarantor, and they’re borrowing the full amount plus costs
  • a client undertaking a simultaneous settlement with the sale and purchase of a property
  • a client borrowing the full amount for an investment pretty utilising the equity in their existing home
  • an SMSF seeking to buy a property, but has not yet had the cash transferred over to pay the deposit
  • an off-the-plan purchase with a sunset clause of 60 months or even more.
  • In all these cases, the one common thread is a lack of cash to pay a deposit, despite the client being perfectly creditworthy to complete settlement.
MPA: Why should brokers partner with Deposit Assure for deposit bonds?
ER:
 I would put it down to three main benefits that you get by recommending and partnering with Deposit Assure.

First of all, we offer brokers and their client’s the easiest and simplest path to getting their deposit bond through our dedicated concierge team. Our concierge team understands, that brokers are extremely busy and deposit bonds are not a core offering of their business. By using our deposit bond concierge team, a broker simply just has to email us their client’s details, and our concierge team will do the rest, from assessment through to completing their application ready for the client to sign. No paperwork, or forms to fill out, just an efficient and reliable service that will ensure that Brokers will get all the credit and we do all the hard work!
 
Brokers and the clients vendors, will have the comfort of knowing that our deposit bonds are backed by the best, QBE Insurance (Australia) Limited, an A+ credit rated insurer. We have seen many leading developers specifically request that any deposit bonds are underwritten by QBE.

Lastly I would say, we offer ongoing training and support to our broker partners. We are committed to supporting brokers on their journey with ongoing training through ongoing webinars, marketing resources and ongoing support for them and their clients deposit bonds.

MPA: How great is the demand for deposit bonds among home buyers? 
ER: 
There is no doubt, awareness and understanding of this product, is low amongst homebuyers and all stakeholders involved in the property transaction. We are here to change this. Our goal is to create desire and sustained demand for homebuyers to use deposit bonds for their next property purchase with the desired outcome for homebuyers to approach brokers for new business when perhaps they would not have otherwise considered it. One way we do this is through publishing real-life stories, where we interview homebuyers to share their story, about how deposit bonds solved their very real problems. 

Interestingly, the vast majority of homebuyers we engage with direct, had never heard of deposit bonds before, and it took a recommendation from a broker or a real estate agent for them to take the initiative to try to learn more about them.  With awareness being so low, the opportunity for a client to take up a deposit bond once recommended is quite strong. 

MPA: What does your monthly webinar cover, why should brokers tune in?
ER:
 With our focus very much on education and training, we offer all mortgage brokers an exclusive free live training session that runs on the last Tuesday of every month. The training content has been developed by mortgage brokers for mortgage brokers and runs for 45 minutes. 

Brokers will learn about all the different purchase scenarios where deposit bonds can be used to add value for their clients. We look at all the eligibility and assessment criteria required for successful lodgement of a deposit bond. We run through the benefits of deposit bonds compared with bank guarantees, cash deposits and personal loans. We also focus on why brokers should add deposit bonds to their toolkit and how they can help drive new business. 
The webinar is less about Deposit Assure and more about lifting the profile of deposit bonds starting with our mortgage broker friends. My promise to your readership is that if they join us for this live training, they will learn all they need to know about deposit bonds in one sitting and will learn what a powerful tool they can be in accessing new markets and how they can start offering them to their clients today.  Interested brokers can save their seat here.

Co-founder of Deposit Assure, Etienne Rizzo made his mark in the graphic design and advertising industries and has managed high profile brands across a diverse range of categories for the last ten years, including Disneyland Resort Paris, Heinz and Medibank.