The procedure for transferring money when buying an apartment from A to Z. Transfer of money in real estate transactions - main methods, pros, cons, security issues Transfer of money for apartment registration
Transferring money when selling an apartment can occur in several ways, depending on the method of payment for the property. There are different ways to contribute the cost - a down payment, payment in cash or through a safe deposit box, wire transfer or with the help of a realtor.
Cash payment method for real estate: nuances and features
If we consider a typical question about cash payment, it is worth considering a number of requirements for processing a purchase and sale transaction. There are three options for paying for real estate:
- Method number 1. Payment is made before signing the contract for the sale of the apartment and notarization of documents. Example - the money has still been transferred to the real owner, but the contract has not been signed. Risks - the buyer may lose finances and real estate if obligations are not fulfilled in good faith.
- Method number 2. Payment after signing sales agreements. Example - the documents have been signed, the money has not yet been transferred. In this case, the seller is at risk.
- Method No. 3. Payment after signing the agreement, but before notarization. When the document is signed but has no legal force, the money is transferred. After this, the contract is certified by a lawyer who must be present at the transaction. Witnesses whose details are indicated in the contract can also serve as insurance.
Money authentication
All banknotes must be checked for authenticity. The seller needs to take care of this in advance; this is his direct responsibility. Otherwise, after accepting payment, no one is responsible for the authenticity of the banknotes.
When checking yourself, you can:
- contact a notary office - they have a detector;
- buy a detector yourself;
- take the detector from the intermediary;
- check authenticity with the bank (additional payment will be required).
After the seller is convinced of the authenticity of the money, the parties sign the contract, or, having signed it the day before, the documents and keys to the apartment are transferred to the new owner.
You can also purchase an apartment for cash through a bank. In this case, all agreements are drawn up exclusively at the bank. In front of the employees, an agreement on the transfer of ownership rights is signed, then settlement takes place. The documents do not require additional certification; money verification is carried out at the request of the seller. If the bank only checks the money, and the actual purchase of the apartment and signing of documents is done in the office, then the seller and the buyer must first:
- draw up contracts with a notary;
- then go to the bank to transfer the money;
- without money, return to the office to sign papers;
- papers sealed with money in envelopes are sent for verification by the bank;
- the parties await verification, after which they come to the bank;
- then the transfer of ownership of the property takes place.
This method is too complicated and risky - it is unlikely that the seller and buyer will want to travel several times with a large amount of money around the city (or beyond).
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Cashless payments - ironclad guarantees or disadvantages and risks?
In case of non-cash payments, payment for real estate is carried out only in national currency from the buyer’s account. He may have several accounts in different banks or cities. Debiting funds between correspondents of the same bank is cheaper; if accounts are opened in different banks, the buyer pays the commission.
The bank acts as an intermediary. A tripartite contract is concluded between the parties- the third party is the financial institution itself. According to the drawn up agreement, money is debited from the buyer’s account and transferred to the seller’s account after providing all signed and certified documents. Risks in this case are excluded.
If for some reason the seller refuses to pay for the transaction, the bank will cancel the transaction and the contract will be declared invalid. This will allow the seller to avoid force majeure circumstances.
The seller must also provide the bank with an extract from the apartment at the time of payment. In this way, the rights of the buyer are protected. Otherwise, the bank is not responsible for further actions with real estate. The buyer may refuse to pay for the property if such certificates are not available, or may make the payment at his own peril and risk.
Possible risks for the seller and buyer
If the deal “falls through” on the eve of payment for unexplained reasons after signing the contracts, the buyer can return the money from his account through the court, providing explanations and arguments why this situation occurred. The court may regard the circumstance as a possible scam. It should also be understood that when working with a bank, both parties will have to pay additional costs.
There are risks for both parties - if the bank suddenly declares itself bankrupt, the money in the buyer’s account will be frozen until the financial institution solves the problem. In the best case, as practice shows, you can get the money back only after several years.
The most common method of transferring money when selling an apartment. The buyer parts with his money after signing the contracts. The bank checks the finances for compliance with the amount declared by the seller. Until the documents are signed, all money will be kept in the buyer's safe deposit box. Once the documents are received by the buyer, the bank, upon notification of both parties, transfers the amount to the seller's safe deposit box or account. He independently verifies the authenticity of banknotes after the agreement comes into force.
If the transaction does not take place, the buyer has the right to withdraw the entire amount of money from his cell, despite the will of the seller. In this case, neither party is required to account for why the deal “fell through.” The Bank acts as an independent official intermediary.
Selling real estate using a letter of credit
The operation is similar to the one carried out through a bank cell, but in this case all expenses are reflected only to the bank participants. That is, the buyer transfers the amount of money to the seller, then the contract is signed. If the transaction is postponed, the seller cannot withdraw the money; it is blocked in the account until the contract is canceled. If the seller is unable to receive and verify the money and the buyer is willing to wait, the money remains blocked in the buyer's account.
As soon as the buyer becomes the owner of the property by decision of the contract, the seller receives money. A certificate of real estate must be submitted to the bank to unfreeze the account and transfer the amount.
Payment for real estate when a deposit is required
When requiring a deposit from the seller’s bank, the buyer is obliged to use such methods of transferring money as:
- seller's letter of credit;
- buyer's cell with transfer of funds only to the seller's account.
The deposit must be issued on the day of registration of all documents and purchase of the apartment. That is, the buyer leaves a deposit and pays a sum of money, and in return receives an apartment. Once the buyer becomes the owner, the apartment falls into the list of bank debts until the full amount of money is transferred to the seller. The bank will monitor the buyer's deposits as well as the seller's account for additions.
The risk of selling an apartment for less than full value using collateral is minimal. But there is a nuance - the seller chooses the method of receiving money himself.
A buyer who is dissatisfied with the proposed payment options can look for another apartment to purchase. The bank does not have the right to change payment methods to which the seller agrees.
Sale of primary and secondary real estate
All of the above payment methods for real estate are suitable for purchasing a secondary market apartment. If the buyer wishes to purchase real estate from the developer (legal entity), then all financial transactions and transactions are carried out through the company's agency or bank.
- If an apartment is purchased in installments, the buyer can partially make a down payment in cash to the company’s account at one of the agencies or cash desks. Other payments are made through the company's bank account.
- If an apartment is purchased at full price, all money is transferred by bank transfer, but to a special account of the agency, which signs an agreement with the buyer. The developer then receives his share of the sale of the property.
Since 2017, another method of paying for apartments in new buildings has been provided - through escrow accounts, which protect the shared contributions of all participants in the transaction. If the house is not put into operation, construction is frozen, now future residents will be able to get their savings back without loss.
In general, all transactions in the primary market are usually carried out through bank transfer, in the secondary market - in cash, but alternative options are allowed due to the safety and security of all transactions.
A real estate purchase and sale transaction involves the need not only to correctly draw up an agreement, but also to correctly organize the exchange of financial resources. Transferring money when selling an apartment can be done in different ways, each of which has its own advantages and disadvantages. To make the right choice, you should carefully read each method.
The exchange of financial resources can be carried out in the following ways:
- by transferring cash from hand to hand;
- non-cash transfer;
- with the involvement of third parties: a real estate agent or a notary;
- through the bank.
Each of these methods has its own nuances that determine the degree of its safety and convenience.
Payment when paying in cash
The apartment purchase and sale agreement is considered concluded after it is signed by the parties to the transaction. Notarization of a document is an optional, but desirable addition to the formalization of the procedure. In this case, the signed agreement is subject to mandatory state registration, after which ownership of the property is transferred from the seller to the buyer.
Moment of money transfer
Cash transfer of finance is allowed both before and after registration of ownership. But no matter at what stage the calculation is made, when choosing this method, both parties to the transaction risk.
If the buyer transfers money before the contract is registered, it turns out that it goes to the actual owner, who can later cancel the sale, claiming that he did not receive payment.
If payment is made after transfer of ownership, the seller is at risk. Because the buyer, having become the owner of the property, may refuse to transfer money altogether.
Cash transfer procedure
Therefore, if the parties choose cash payment, a number of conditions must be met:
- Confirm the transfer of money with a receipt. If signed by the parties, it has legal force and can serve as evidence of the fact of settlement. The document is drawn up in free form indicating:
- details of the parties;
- description of the object of the transaction;
- transferred amount in numbers and words;
- date of settlement;
- signature of the parties.
- Ensure the presence of witnesses or have the receipt notarized.
- Check banknotes for authenticity. The seller must take care of this in advance, because after the money is transferred no one is responsible for it. For such a check, you can contact a notary, a bank, or purchase a detector and pass the bills through it yourself.
The safest way is a safe deposit box
The safest way to pay in cash is to use a safe deposit box. The algorithm of actions in this case is as follows:
- visit to the selected bank of both parties to the transaction;
- renting a safe deposit box for one of them (usually the buyer);
- signing a lease agreement;
- placing cash in a safe deposit box;
- blocking the cell until the transfer of ownership is completed.
The high reliability of this calculation method is due to the fact that an intermediary, the bank, is responsible for the transfer of finances from one person to another. Once the lease agreement is signed and the money is placed in the locker, both parties to the agreement lose access to it. It can be opened only after the transaction is completed. If it is successful and the transfer of ownership is formalized accordingly, the seller will be able to immediately withdraw the money from the cell. And if the deal falls through for some reason, the bank will transfer the funds back to the buyer.
What costs accompany one or another method of transferring money?
Like any service, mediation in the process of transferring financial resources requires payment. If we are talking about cash payments without involving a bank, you should prepare for the costs of:
- notarization of receipt;
- additional payment to a representative of the real estate agency for presence during the transfer and provision of witness testimony if necessary;
- checking banknotes.
If the parties decide to use a safe deposit box, the cost estimate must take into account its payment. It is set depending on the number of days during which funds will be stored in the cell. Thus, attracting a bank requires higher costs, which must be taken into account by the participants in the transaction. You should also clarify who pays for the cell and whether the rental fee is included in the amount of funds placed in it. However, the additional expense is justified by the significant reduction in the risk of fraud for both the seller and the buyer.
Making a purchase through a bank letter of credit
This method is similar to using a cell, because in each case the role of intermediary in the transaction is performed by the bank. But unlike the first method, a letter of credit is used for non-cash payment. The scheme is as follows:
- an account is opened in the name of one of the parties to the transaction (usually the buyer);
- funds are transferred to it, which will serve as payment for the property;
- after the transfer of ownership is completed, the bank transfers funds to the seller’s account, thus acting as a guarantor of the parties’ fulfillment of their obligations.
If the transaction is cancelled, the money will also be returned to the owner. This payment method is safer because no cash is involved in the transaction. This means there is no risk of using counterfeit bills or making mistakes in counting them.
The cost of a letter of credit is higher than when opening a safe deposit box, in addition, it has more difficulties in execution.
Advantages of a letter of credit:
- high degree of reliability;
- no hidden fees;
- the ability to transfer funds to another bank or to another account without withdrawing cash and paying the corresponding interest.
Deposit with a notary
Another option for non-cash payment using an intermediary is a notary deposit. In this case, a special depository account is opened to which the buyer transfers the transaction amount. It is stored there until the transaction is completed, when all formalities with paperwork and transfer of property are completed. Once they are completed, the notary transfers the funds to the seller or returns them to the buyer (depending on the outcome of the transaction). The basis for transferring money to the seller is an extract from the Unified State Register, which records the transfer of ownership.
Using a mortgage
If a buyer wants to purchase real estate using a loan, the specifics of the procedure must be taken into account. The stages of the transaction are as follows:
- The borrower submits the necessary documents to the bank and awaits consideration of his application.
- If it is approved, he opens an account and credits it with a certain amount specified by the bank as a down payment for housing.
- Looks for real estate at a price that matches the loan being issued.
- After the desired apartment has been found and the owner’s consent to such a payment method has been obtained, he must confirm it with the bank and open an account to receive payment.
- After collecting all the necessary papers and completing all formalities, the bank transfers to the seller’s account an amount corresponding to the cost of the apartment, taking into account the down payment made.
- Next, the buyer repays the debt with monthly payments (by the method chosen under the loan agreement).
If the buyer subsequently wants to sell the property that was purchased with credit funds, it should be taken into account that it is pledged to the bank. Therefore, any operations are possible only with his consent.
When a borrower wants to sell an apartment for which he has not yet paid off the loan, the procedure for transferring money is controlled by the bank. It is he who chooses the payment method, as a rule, it is a letter of credit or renting a cell. While the necessary documents are being collected and the transfer of ownership is being completed, financial resources are blocked. The seller can receive this money only after completing the specified procedures and only if it is enough to pay the mortgage debt.
It should be taken into account here that not every bank is equipped with safe deposit boxes. If they are not there, there may be additional significant costs associated with transferring a large amount to a third-party banking organization.
The parties to the transaction can make an oral agreement, according to which the buyer repays the loan, and the seller registers an apartment for him. But this method is associated with certain risks, for example, additional payments for early closure of the debt.
Thus, the most convenient and reliable method of payment will be a letter of credit. The buyer opens a bank account and deposits the required amount of money into it. After completion of all formalities and transfer of ownership, the finances are received by the bank as payment for the mortgage debt.
If a cashless payment for a mortgaged apartment is made before registering a new title, the seller may also deceive the buyer. The loan has been repaid and there is no longer any need to re-register the property. In such a case, the bank may impose a restriction on the transaction, thereby freezing the funds received. Therefore, involving a banking organization as a third party when making any real estate transactions is a way to significantly increase their reliability.
Choosing a bank as an intermediary in the transfer of money has not only advantages, but also disadvantages. The main one is the inability to choose the calculation method. If it is customary for a bank to act through a letter of credit or only through a safe deposit box, no one will change the rules for the sake of one client. Therefore, before going there, you should decide on the payment method and choose a bank in accordance with it.
Risks associated with attracting an organization:
- employee fraud;
- termination of the organization's activities.
In the first case, you can count on compensation, because the bank values its reputation. And in the second, a legal successor will be found for the bankrupt, to whom his obligations will be transferred. Thus, the risk of losing money in this case is minimal.
Another feature of the method is the transparency of the transaction. You cannot underestimate its amount for the purpose of tax evasion.
Thus, engaging a bank to pay for an apartment is the most convenient and reliable way.
Additional tips to reduce the risk of financial transfer fraud:
- The right choice of place if you choose cash payment. You should not transfer money at home or in an unfamiliar deserted place. You should also avoid large crowds of people (shopping centers, cinema halls, etc.). In the event of an unforeseen situation, the guards may not react in time, and it will be much easier for the fraudster to get lost in the crowd.
- Making an advance payment. If the seller demands to pay a large amount in advance, this is a reason to be wary, because there is a risk of never seeing your money again. The deposit is only a confirmation of the seriousness of the buyer’s intentions and should not amount to more than 5-10% of the purchase price.
- Attracting professionals. The participation of a qualified lawyer, notary, realtor or bank employee significantly increases the level of reliability of the transaction, because they:
- due to professional knowledge and experience, they can provide for various nuances;
- can give qualified testimony in the event of a trial.
Thus, to successfully close a transaction, it is necessary to take into account many nuances that relate not only to the preparation of documentation, but also to the issue of transfer of financial resources.
Real estate transactions require careful documentation. But it is equally important to think about the payment procedure. In what ways can you transfer money when selling an apartment in 2019?
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People are already accustomed to the fact that when selling real estate, a correct purchase and sale agreement must be drawn up. Its content is thought out in detail, every nuance is taken into account.
But when it comes to transaction settlements, most situations are standard. The money is given before or after the conclusion of the contract. And it is precisely this moment that may turn out to be the most significant problem.
How does the process of transferring money happen when selling an apartment in 2019 and how to avoid facing fraud?
General points
The transfer of money when selling an apartment and the choice of payment option depend on the type of market in which the transaction is being made.
When an apartment is sold on the primary market, an individual represented by the buyer and a legal entity represented by the developer take part in the transaction.
The procedure for making payments is determined by the developer. Money is transferred from the buyer’s account based on the invoice issued by the developer company, in accordance with the terms of the contract.
If the purchase of an apartment is carried out through participation in, then an alternative option is used, provided for by law since 2019.
The protection of shareholders' money is ensured by transferring funds through escrow accounts.
That is, a non-cash form of payment is used, but the money goes to a special bank account and not directly to the developer.
The situation with payment in the secondary market is much more complicated. Cash payments are somehow more accepted here.
In fact, the buyer can transfer a “suitcase of money” to the seller, and the latter can also claim that there was no transfer.
The risks are quite high. They increase when several sellers participate in a transaction at once, when the transferred funds are immediately distributed among them.
Risks also exist for secondary sellers. For example, an agreement has been reached to receive money after signing and transferring an apartment.
And so the seller fulfilled his obligations, but there was still no money. Of course, he has the right to terminate the contract, but this does not mean that the apartment will be returned to him.
To return property, you will need to go to court and spend a lot of time on litigation.
How to resolve the issue of payment for real estate correctly and how to transfer money when buying/selling an apartment?
Basic Concepts
The sale of an apartment involves the transfer of ownership under the terms of the concluded agreement. This agreement includes quite a few sections.
Their total number depends only on the wishes of the parties. But any contract must have a price clause.
The contract price is the amount at which the seller values the apartment and what he intends to receive from the buyer in exchange for the transferred ownership.
The transfer of funds clause includes:
- date of transfer of funds;
- method of transmission or transfer;
- other significant moments.
Participants in the transaction have the right to independently choose the payment option and set the moment of transfer of funds.
In this case, the person acting as the seller has the right to receive payment for the apartment. This is the owner of the apartment or his legal representative.
Procedure for concluding a transaction
Conventionally, the transaction for the sale of an apartment can be divided into five stages:
As for the transfer of money for an apartment, it is logical to assume that a sum of money should be exchanged for ownership. And this is where the main problem arises.
If the buyer transfers money before receiving the apartment, then in the future there may be difficulties with the actual property.
You can wait months for the owner to vacate the property. When the seller transfers the apartment along with the title to it before receiving the money, there is a risk of not receiving payment at all.
And cases when one of the parties receives what is due under the transaction and subsequently refuses to acknowledge this fact are also not uncommon.
Thus, the correct procedure for transferring money when selling an apartment is important for both parties to the apartment alienation transaction. And here participants have several options.
Current standards
The procedure for selling real estate is regulated. This is what is called “Purchase and Sale”. Section 7 of this chapter talks about the sale of real estate.
Each individual article of the paragraph affects individual aspects of the transaction - the contract, its form, state registration, definition of the subject, etc.
It is worth noting that you should not transfer money before registering ownership. Often, scammers use just such a scheme when they take money before contacting Rosreestr.
During the registration process, sometimes nuances are identified that do not allow registering ownership (for example, the seller is not in fact authorized to conduct the transaction).
But it is not always possible to return money already transferred. And in the absence of proper evidence, it is completely impossible to prove that the money was transferred.
On the other hand, the seller does not want to take risks. He wants to be sure that he will actually receive money for the apartment. How is money transferred in transactions between individuals?
Most often, money is transferred in cash. And often used as evidence of the receipt and transfer of funds.
This is a fairly well-known tool and, of course, it has its place. But in the modern world there are safer ways to transfer money to the seller.
Performing the calculation
There are three safest ways to transfer money in resale real estate transactions. This:
- safe deposit box;
- hiring a notary;
- letter of credit
The cell is used when transferring cash. A notary can help with payments, both in cash and by bank transfer. A letter of credit implies exclusively non-cash payment.
Each of the listed methods has its advantages. But at the same time, you need to know the subtleties of using each method.
If you correctly apply the chosen option, then the probable risks associated with the transfer of money are reduced to almost zero.
Through a safe deposit box
Renting a safe deposit box in a bank has recently become increasingly popular when making payments in the real estate market. A safe deposit box is a safe deposit box in a special bank vault (depository).
The bank leases such a safe for a period of any duration in order to preserve valuables. At the same time, the bank does not check what will be saved in the cell.
The main banking task is to ensure the protection of the safe and control access to it. Due to this, the transfer of money through the bank is carried out in a strictly confidential manner.
The buyer becomes the tenant of the cell. He deposits the amount in the safe intended for transfer to the seller.
The latter can receive money only in accordance with the terms of an additional agreement concluded between the seller, buyer and bank.
The drawn up agreement specifies the conditions for access to the locker - a specific period and documents that the seller must provide.
The essence of this method is that the seller documents the fact to a specific buyer.
In return, he gets the opportunity to extract money from the cell. If the seller does not show up within the established time frame, the buyer can collect the money himself.
In such calculations, cash is counted and checked at the bank when it is deposited in the safe, in the presence of the seller.
In this case, the key to the safe can remain with the buyer until funds are received after state registration or immediately transferred to the seller.
Important! The agreement may provide for the provision of shared access, regardless of other conditions. For example, the parties refused the deal.
In order not to wait for the deadline to expire, the participants in the proposed transaction can jointly open the safe, and the buyer will take his money back.
For cash
Cash transfer can be carried out without involving a bank. For example, the buyer transfers funds and receives a receipt in return.
This becomes evidence of the transfer of funds and, if necessary, such a document can even be used in legal proceedings.
But at the same time you need to draw up a receipt correctly. The seller writes it, preferably completely by hand, without erasing or crossing out, and then certifies it with his signature corresponding to the passport sample.
Secure cash transfer is ensured by attracting a notary's deposit. The money is placed in a special notary account before the transaction.
After the buyer registers ownership, the money is transferred to the seller.
The conditions for receiving money are also specified in the agreement, as in the case of a safe deposit box. The notary's deposit can also be used for non-cash payments.
Other options
Among other options, a letter of credit should be mentioned. This is a bank service, or rather an obligation, to implement, on the client’s instructions, a payment from the account in favor of the specified recipient upon presentation of a certain list of documents.
In general, the scheme is the same as that of a safe deposit box. The difference is that non-cash payment is used.
A letter of credit can have different expressions, but when selling an apartment, a covered irrevocable letter of credit is most often used.
Covered means that the buyer's bank (issuing bank) actually transfers the due amount of money to the seller's bank (executing bank).
Irrevocability means that the issuing bank cannot call the money back without good reason.
Transmission scheme
How does the transfer of money from buyer to seller take place? The scheme for transferring money when selling an apartment depends entirely on the method chosen by the parties:
| Cash from hand to hand | the buyer transfers money to the seller; the seller recalculates the amount received (preferably checks the bills for authenticity) and writes a receipt; the receipt is given to the buyer |
| Cash via safe deposit box | the parties to the transaction draw up an agreement with the terms of transfer and access; in the presence of all participants, the money is checked, counted and placed in the cell; after fulfilling his obligations, the seller presents the agreed documents and receives money |
| Through a notary's deposit | an additional agreement to the agreement on the terms of acceptance and transfer of money is drawn up; money is credited to the notary's account (in cash or by transfer from the account); the seller fulfills the terms of the agreement and provides the necessary evidence; the notary issues cash or transfers money to the seller’s account |
| By letter of credit | the buyer enters into a letter of credit agreement with the issuing bank; the necessary documents are drawn up (on the terms of payment, supporting documents, etc.); money is transferred to the executing bank (seller’s bank); the seller fulfills his obligations (transfers the apartment); the buyer registers ownership; the seller contacts his bank to receive funds |
At what point does it happen
The contract for the sale and purchase of an apartment always specifies the moment when the money is transferred. As a rule, this is provided for in the clause on the “Settlement Procedure”.
Theoretically, the parties can independently determine the moment of transfer of funds. So, when transferring money in cash, payment can be made:
| Before signing the contract and state registration of ownership rights | In this case, a situation arises in which the agreement is not signed, but the money is transferred. As a result, both money and property rights belong to one person. Creates a significant risk for the buyer |
| After signing the contract and state registration of the acquired right | Here the circumstances are exactly the opposite. Both the money and the right to the apartment are with the buyer. The seller takes a significant risk |
| After signing the contract on the day of the transaction, but before state registration of rights | The seller retains the rights to the apartment until the transfer of ownership is registered. Of course, there is still risk for the buyer. But at the same time he has evidence in the form of a concluded agreement and a receipt. If necessary, witnesses can be involved in the transfer of money |
And yet, no matter at what point cash is transferred when selling an apartment, the transaction remains risky. It's a different matter when using a bank safe, notarized deposit or letter of credit.
Video: 7 mistakes when transferring money for an apartment
In this case, the moment of transmission itself is not important. You can put money into savings absolutely at any time. Anyway, the seller will receive them only after fulfilling the pre-agreed conditions.
Possible additional costs
If there are so many safe ways to transfer money when buying and selling, then the question reasonably arises as to why cash payments from hand to hand are still not obsolete.
This is explained by the desire to avoid additional costs. Any of the listed safe methods of transferring money assumes such by default.
If you use a safe deposit box, you will need to pay for the rental of the safe. In this case, the rental fee depends on both the storage period and the size of the cell (amount limit).
The cost of renting a cell varies between 1-3 thousand rubles per month. In addition, 2-5 thousand rubles will need to be paid for drawing up an additional agreement.
The client may also be charged an insurance premium for the locker and a deposit for the key to it in case of loss. When using a notary deposit, you will need to pay about 1,500 rubles.
But this is provided that the service is provided as an additional service when drawing up a purchase and sale agreement with a notary.
But you need to take into account that banks charge a commission for transferring funds from account to account. In this case, it turns out that the commission is charged twice.
In addition, an additional commission is calculated when cashing out funds. When a letter of credit is used, the cost of banking services increases.
The number of associated costs is also increasing - opening an account by the buyer and seller, commissions for transfers between banks, commissions for cashing out funds.
In addition, not many banks provide letters of credit, and due to its rare use, many banks simply do not have the skill to use it.
Real estate transactions always involve dealing with multi-million dollar amounts. And in the real estate market there are a lot of scammers, swindlers and other “unclean” people.
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The issue of security of payments cannot be treated irresponsibly - after all, this will determine whether the transaction will be completed successfully or whether another victim will fall into the collection of victims of the next deceivers?
At what point does it happen
One of the main issues in real estate transactions is the timing of the transfer of funds from one party to the other. Money can be transferred both before the transaction is formalized in Rosreestr and after, but there are some nuances here.
So, for the seller, the most acceptable option is when the buyer pays the sale price even before the apartment changes its owner.
In addition, the seller thereby insures himself against the risks of being deceived. After all, after a change of owner, the “reverse” procedure can only be carried out through the court - if the transaction is declared invalid.
If the buyer appears to be in good faith, the moment of transfer of funds does not play, in fact, any role. Of course, there is a possibility that after receiving funds the seller will refuse to continue the transaction. Fortunately, such cases are few.
Thus, two small conclusions can be drawn:
- it is desirable that the transfer of money be carried out after the signing of the contract, but before the state registration of ownership;
- if the buyer avoids payment in every possible way before the state registration of ownership, there is a risk that this is a fraudster who is simply not going to give the money.
Rules
The rules for transferring funds for an apartment depend on the market in which the residential property is purchased, as well as on some other conditions:
- If the transaction takes place on the primary real estate market, then the parties are the buyer and the developer (individual and legal entity, respectively). Typically, payments in this case are made cashless, but cash can also be deposited through the developer's cash desk. The method of transferring funds is chosen by the developer, and the buyer can influence this only in rare cases.
- Since 2019, for DPAs (share participation agreements), the legislation has provided for an alternative payment scheme - through escrow accounts. In the presented case, money is also transferred by bank transfer, but not directly to the developer, but to a special current account.
- If the transaction is carried out on the secondary market, it is generally accepted to pay in cash, but this is the least secure method.
To successfully complete a transaction without the risk of being deceived, it is better to use safe payment methods, for example:
- through a safe deposit box at a bank;
- letter of credit;
- through a notary deposit.
How does the transfer of money occur when selling an apartment?
Let's consider what methods exist and which of them are the most acceptable and safe for both parties to the transaction.
Through a safe deposit box
The most popular method of transferring funds for a purchase is cash payment, but without directly transferring money “into the hands” of the seller, but using a special safe deposit box in a bank.
The procedure for renting and using a locker is maximally adapted for conducting various transactions with real estate, including multi-stage ones.
A safe deposit box is a small safe, comparable to a desk drawer, located in a special bank vault - a depository.
The credit structure provides services for renting a cell for an unlimited period. At the same time, the credit institution does not control what exactly the tenant puts in the locker.
The banking institution only provides security for the safe deposit box and controls access to it. Thus, complete confidentiality when transferring funds is guaranteed.
The tenant of a safe deposit box is usually the buyer of real estate. He also deposits funds in the amount established by the seller in the safe.
The seller can withdraw funds only if the conditions specified in the add. agreement to the safe deposit box rental agreement. The agreement is concluded between 3 parties - the buyer, the seller and the bank.
In an additional agreement, the parties can prescribe specific conditions for access to the box for each person.
For example, the seller must be given specific deadlines and documents that must be presented to the bank to withdraw money from the safe. If the apartment does not change its owner within the established time frame, the buyer will be able to withdraw his money.
As a rule, confirmation for the bank of the transfer of ownership is the seller’s passport and the purchase and sale agreement with a mark from Rosreestr stating that the transaction has passed state registration.
The parties can also determine additional conditions for the seller’s access to the locker. For example, indicate that it is obligatory to provide an extract from the house register confirming the absence of registered persons in.
Through a notary
The law, in particular, Art. 327 of the Civil Code of the Russian Federation, provides for the possibility of debtors under a monetary obligation to deposit funds on the deposit of a notary.
Based on part 1.1. of this article, an agreement between the creditor and the debtor may provide for the condition that the debtor (who is also the buyer of the apartment) is obliged to fulfill the obligation to pay the sale price only by depositing funds into a notarial deposit.
Thus, in order to use this payment method, the parties to the transaction need to indicate in the DCP that settlements will be made by means of a notarial deposit.
How do payments through a notary occur? The buyer of the apartment simply visits the notary at the location of the transaction and gives the money either in cash or through bank transfer.
The notary accepts the money and stores it until the creditor (seller of the apartment) fulfills the conditions for state registration of the transaction.
The notary does not keep money in his office. Regardless of how they are transferred by the buyer, they are in the notary's bank account.
Please note that the Civil Code of the Russian Federation allows the buyer to withdraw funds from the notarial deposit at any time.
Thus, the parties to the contract must specify a condition in the agreement regarding specific cases when the buyer can withdraw money from the notary deposit in order to avoid misunderstandings.
On the day of the transaction
Typically, same-day settlement is a cash payment method. However, it is recommended to use this “old-fashioned” method only in extreme cases and with 100% confidence in the integrity of the counterparty.
Cash payments are quite common if the transaction is carried out, for example, between close relatives or friends.
Risks associated with cash payments:
- the need to transport large amounts of money from place to place;
- deception and fraud when counting banknotes;
- transfer of counterfeit banknotes.
From account to account
The parties to the process can use another, but less popular method (compared to a safe deposit box) - a letter of credit.
A letter of credit is a service provided by a credit institution for the transfer of funds from the account of the buyer of an apartment to the account of the seller upon presentation by the seller of documents certifying the transaction.
A safe deposit box and a letter of credit are almost identical methods of transferring money, with one exception. A letter of credit is a non-cash payment, and a safe deposit box is cash.
For mortgage
In cases where a potential buyer takes out a mortgage to purchase residential premises, the correctness and legality of the calculations is controlled by the creditor bank, because it is a priori interested in the safety of the borrowed funds.
Depending on the specific bank, payments can be made either through a safe deposit box or through a letter of credit.
If payments are made through a safe deposit box, the creditor bank may request an additional package of documentation to provide the seller with access to the safe.
Such documents may include:
- an extract from the Unified State Register confirming the transfer of ownership;
- receipt for receipt of money;
- certificate from the Registration Chamber on acceptance of a package of documents for state registration, etc.
Basic mistakes
The main mistakes that parties make when carrying out transactions involving the transfer of funds when buying and selling real estate:
- Choosing the wrong method to transfer money.
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