Facts About Down Payment Options
Procuring a Down Payment Bond              DPO is a privately owned companyWho is DPO?   founded in the United States in 2...
Procuring a Down Payment Bond            A down payment bond is a newWhat is a   financial alternative for the deposit or ...
Procuring a Down Payment Bond Are Down     No. Down payment bonds have been              used successfully in many other  ...
Procuring a Down Payment BondWhy use a   With a down payment bond, there is no            need to use cash for the require...
Procuring a Down Payment BondAre Down    Yes. All DPO down payment bonds are            underwritten by QBE Specialty Insu...
Procuring a Down Payment BondWho is QBE   QBE Insurance Group Limited is one of             the top 25 insurers and reinsu...
Procuring a Down Payment Bond What is the     Down payment bonds replace the                 requirement to outlay a cash ...
Procuring a Down Payment Bond What is the     An approved down payment bond                 assures sellers and developers...
Procuring a Down Payment Bond What is the     An approved down payment bond                 assures sellers and developers...
Procuring a Down Payment Bond Who can      Eligible applicants must be US citizens.              Applicants can be individ...
Procuring a Down Payment Bond              To qualify for a Down payment bond an How does     applicant will complete a DP...
Procuring a Down Payment Bond              For many of today’s property buyer’s, the cash              required for the de...
Procuring a Down Payment Bond   Is a Down     Yes. For example, a 12-month Down Payment                 Bond representing ...
Procuring a Down Payment Bond                  The Down Payment Bond is a legalWill the seller   document and it is at the...
Procuring a Down Payment Bond              It may, if not already included. If there is  Does the    no reference to Down ...
Procuring a Down Payment Bond                  Down Payment Option’s Down Payment  What is the     Bonds are issued on the...
Procuring a Down Payment Bond                 If you default under the Purchase andWhat happens     Sale agreement, the se...
Procuring a Down Payment Bond                The Down Payment Bond expires when                one of the following occurs...
Procuring a Down Payment Bond                   It depends on the circumstances. If you                   return the unuse...
Procuring a Down Payment Bond                   If a purchaser does not complete their purchase, the                   sel...
Connect with Us!Down Payment Options     410 S. Rampart Boulevard              Suite #390       Las Vegas, NV 89145       ...
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Facts About Down Payment Bonds

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While Down Payment Bonds are hardly new, they have not been widely used through North america until recently. Since there are many that are unfamiliar with this tool, we've put together some common questions with answers regarding Down payment Options.

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Facts About Down Payment Bonds

  1. 1. Facts About Down Payment Options
  2. 2. Procuring a Down Payment Bond DPO is a privately owned companyWho is DPO? founded in the United States in 2011. Its primary focus is providing Down payment Bonds for property purchases. DPO is a first full-service down payment bonding company in the United States. DPO is an MGA of QBE the Americas.
  3. 3. Procuring a Down Payment Bond A down payment bond is a newWhat is a financial alternative for the deposit or down payment required on real estate Down purchases. A down payment bond canPayment be used for all or part of the transaction’s required deposit amounts, Bond? for as much as 20 percent of the purchase price, and can be issued for a minimum period of 3 months to 36 months.
  4. 4. Procuring a Down Payment Bond Are Down No. Down payment bonds have been used successfully in many other Payment countries including Australia and New Zealand for more than 10 years. TheBonds a New Down Payment bond product is Product? relatively new to the United States.
  5. 5. Procuring a Down Payment BondWhy use a With a down payment bond, there is no need to use cash for the required down Down payment when purchasing a property. Buyers using down payment bonds doPayment not need to withdraw cash from their Bond? savings or investments, or obtain financing by using equity in another property. A down payment bond is also less expensive than traditional real estate financing.
  6. 6. Procuring a Down Payment BondAre Down Yes. All DPO down payment bonds are underwritten by QBE Specialty InsurancePayment Company, a part of the QBE Insurance Group Limited (QBE). Bonds insured?
  7. 7. Procuring a Down Payment BondWho is QBE QBE Insurance Group Limited is one of the top 25 insurers and reinsurersInsurance worldwide with operations in all key global insurance markets. QBE is an Group? Australian listed company with a Group Head office based in Sydney, and has operations in 49 countries with over 13,500 staff worldwide. Rated "A" (Excellent) by A.M. Best and "A+" by Standard and Poors.
  8. 8. Procuring a Down Payment Bond What is the Down payment bonds replace the requirement to outlay a cash deposit,Benefit to the allowing buyers to keep their money working for them right up until closing. Buyer? Then, at closing, they pay the property’s full purchase price.
  9. 9. Procuring a Down Payment Bond What is the An approved down payment bond assures sellers and developers thatBenefit to the buyers have been pre-qualified as having the financial capability to Seller or complete the transaction. If the buyer does not close the property transaction,Developer? QBE pays the seller the full amount of the down payment bond.
  10. 10. Procuring a Down Payment Bond What is the An approved down payment bond assures sellers and developers thatBenefit to the buyers have been pre-qualified as having the financial capability to Seller or complete the transaction. If the buyer does not close the property transaction,Developer? QBE pays the seller the full amount of the down payment bond.
  11. 11. Procuring a Down Payment Bond Who can Eligible applicants must be US citizens. Applicants can be individuals orapply for a couples. The applicant may be an existing property owner who wishes to Down purchase another property or investors who wish to expand their property Payment portfolio. Bond?
  12. 12. Procuring a Down Payment Bond To qualify for a Down payment bond an How does applicant will complete a DPO application form and supply theone qualify supporting information required as noted in the application form. DPO willfor a Down then underwrite and assess the Payment application and determine whether the applicant has the financial capacity to Bond? be able to complete on the new property purchase taking into account the applicants current overall financial position.
  13. 13. Procuring a Down Payment Bond For many of today’s property buyer’s, the cash required for the deposit is often tied up in their Why do current home or other investments. This can mean either expensive bridging finance or property borrowing from a finance company/bank at high interest rates. Regardless of where thebuyers like finance is obtained, interest charges, establishment fees and other up-front costs Down connected with the loan can be expensive and time-consuming to arrange. For buyers that doPayment have the cash available for the deposit, they would prefer to tie up a small portion of this, Bonds? rather than the full deposit amount. This allows their deposit money to continue working for them, right up until closing when they pay the full purchase price.
  14. 14. Procuring a Down Payment Bond Is a Down Yes. For example, a 12-month Down Payment Bond representing a $60,000 deposit wouldPayment Bond cost a once only fee of approximately $2,700, (plus applicable taxes and fees). On the othercheaper than hand, short-term finance for $60,000 could cost: An application fee (say 1.0% of the other Deposit amount to be borrowed) = $600, plus Interest payable (assuming interest rate of 6.5%) = Financing $3,900. The total cost of bridging finance in this example is $6,500. In this simple example a Options? Down Payment Bond is considerably cheaper than other financing methods, plus far more convenient to organize.
  15. 15. Procuring a Down Payment Bond The Down Payment Bond is a legalWill the seller document and it is at the sole discretion of the seller to accept a Down Paymentaccept my Bond. Given the many benefits of Down Payment Bonds to sellers and the fact Down that our Down Payment Bonds are backed by QBE Insurance, many sellers Payment (and their financiers) will accept a Down Bond? Payment Options Down Payment Bond as an acceptable way of buying a property.
  16. 16. Procuring a Down Payment Bond It may, if not already included. If there is Does the no reference to Down Payment Bonds in the Purchase and Sale agreement, it is Purchase recommended to ask the seller to include the acceptance of Down and Sale Payment Bonds in the Purchase and agreement Sale agreement. This reference should be put in the deposit/earnest deposit need to be section or can be a separate addendum to the contract. Downammended? Payment Options can provide you or the seller with the wording for this, if required.
  17. 17. Procuring a Down Payment Bond Down Payment Option’s Down Payment What is the Bonds are issued on the understanding that you (the buyer) will pay the seller Indemnity the Down Payment Bond amount on the closing date of the contract (as you will Agreement pay the full purchase price of the that is property). The Indemnity Agreement is a legally binding right you give to QBEincluded in the Insurance to pursue recovery against you for any part of the Down Payment Application Bond amount that must be paid to the seller by QBE if you default under the Form? Purchase and Sale agreement.
  18. 18. Procuring a Down Payment Bond If you default under the Purchase andWhat happens Sale agreement, the seller is entitled to retain the Down Payment Bond amount. if I default The seller can claim this amount from QBE Insurance. This amount will be paid under the to the seller nominated in thePurchase and agreement after QBE Insurance is provided with the request for payment Sale and notice of termination of the Purchase and Sale agreement. QBE agreement? Insurance will then seek recovery from the buyer via the Indemnity Agreement, which is signed by you as part of the application form.
  19. 19. Procuring a Down Payment Bond The Down Payment Bond expires when one of the following occurs: - The expiryWhen does the date as noted on the Down PaymentDown Payment Bond passes; - The Purchase and Sale agreement is completed (closed), Bond expire? terminated or rescinded; or - When a claim is paid by QBE Insurance
  20. 20. Procuring a Down Payment Bond It depends on the circumstances. If you return the unused, original Down Can I obtain a Payment Bond Certificate to us within 30 days of issue, the premium will berefund after the refunded. An administration fee will beDown Payment deducted and the balance will be refunded to you. If the development youBond has been are buying in does not “break ground”, then we will refund you the premium to issued? you on a pro-rata basis based on the time that the seller has held the Down Payment Bond. An administration fee will also be deducted.
  21. 21. Procuring a Down Payment Bond If a purchaser does not complete their purchase, the seller can make a claim directly to Down PaymentAs a seller, how Options, by providing the following documents: - A letter from the seller/seller’s attorney to Down do I make a Payment Options demanding payment of the Down Payment Bond and stating the reason why. This letterclaim when my must state that the purchaser has not completed their purchase obligation under the purchase buyer has agreement/contract and that the seller has not been paid the deposit by the purchaser; - A copy of the defaulted on notice from the seller to the purchaser, where the seller has cancelled/terminated the purchase closing? agreement/contract due to the purchaser not meeting their obligation, entitling the Vendor to retain the deposit; and - The original Down Payment Bond.
  22. 22. Connect with Us!Down Payment Options 410 S. Rampart Boulevard Suite #390 Las Vegas, NV 89145 Tel. 1.702.726.6818 info@downpaymentoptions.com www.downpaymentoptions.com

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