Hi.............,
The deposit bond is a form of insurance policy, but it is for the vendor’s benefit only. If the insurer is required to pay the vendor pursuant to the deposit bond, the insurer will then look to the purchaser for recovery of the amount paid. It is important to remember that the purchaser remains responsible for completion of the contract, including the payment of any costs and penalties associated with a default. The deposit bond is simply a means by which the vendor can be assured that a sale to the purchaser with the deposit bond is safe.