Buying a property is categorizedtransactions with high risk, so the seller may require to make a deal only using a letter of credit. This is understandable, since calculations using such a system are the most reliable option for both parties. That is why it is required to consider in detail not only what it is, but also how it works in reality.
Transactions with real estate
If we consider this kind of interaction inthe most simplified form, the buyer buys the object, pays the money for it, and the seller sells it at the price at which the agreement was reached and receives the money. It's all quite simple, but there are certain nuances.
Важно понимать, что сделка купли-продажи будет recognized held only in case of successful registration of the contract of sale in the relevant registration structures. Such a situation is quite real when the contract is signed, and even referred by the buyer to the registration authorities, but then the seller decided not to sell his property. He goes to Rosreestr to pick up a statement of intent to sell real estate.
In such cases, there is a problem, especially ifAt this point, the money has already been transferred to the seller. For their return will need to go to court, which is quite a long and costly affair. It’s a situation where you cannot pay right away, but don’t give the money either, because the seller will not have a guarantee that the buyer will give the money after registration. In this case, there is a great risk for both parties to remain both without money and without an apartment.
general characteristics
A letter of credit is one of the modern formscashless payments used for the interaction of the seller and the buyer. In fact, it is the guarantor of the security and legality of any transactions. For individuals, a letter of credit when purchasing real estate has such an indisputable advantage, as all transactions in a non-cash form: this is the absence of the need for having a large amount of money on hand, as well as concern for their transportation. When issuing a letter of credit, the buyer authorizes the bank to transfer a certain amount of money to the seller’s account after it has fulfilled and confirmed certain obligations under the contract.
Practical use
If we talk about how to apply letter of credit atreal estate purchase, then there are certain features. The settlement scheme in this case looks a certain way. A contract is drawn up between the buyer and the seller that such a form will be used for mutual settlements for the transaction. The letter of credit agreement contains all the information about what the payment terms and methods of notifying the parties will be used, as well as the details of the participants in the transaction.
The buyer should contact the bank thatservices to arrange a letter of credit there. A special account is also opened in the merchant's bank. The buyer’s bank will transfer funds from his client’s account to it. It turns out that the funds in the seller’s letter of credit are usually located before the start of the transaction. This is the essence of security for both parties.
How to get funds
Cash for the seller will be availableonly when the purchase and sale transaction is completed, and the bank will be provided with all the documents necessary for its confirmation. If there are no doubts about their legality, correctness and accuracy, the seller’s bank will debit the funds from the credit account to the client’s account.
Required Documentation
Такой тип сделок, как покупка недвижимости, involves the provision of a contract of sale of a house or apartment that has passed the state registration procedure. Some banks request extracts from the unified state register of rights that will confirm the buyer's ownership of the property purchased. When finding accounts of the seller and the buyer in the same bank, the scheme becomes much easier.
The advantages of a letter of credit
If you use a letter of credit when buyingreal estate, there is a whole range of advantages for both parties to the transaction. For the seller it will be a guarantee of receipt of funds in full from the buyer. The money will be in the buyer's letter of credit already at the time of the transaction, so he will be confident in their safety. The bank guarantees payment if the seller submits all the required documents and complies with the terms of the letter of credit.
Buyer can count on full warranty.transactions: if for some reason the transaction does not take place, then the refund will be made in full. If the seller fails to fulfill at least one of the terms of the letter of credit, the payment by the bank will not be made.
Buying a property using a letter of credit allows you not to make an advance payment or pay for the transaction in parts.
Non-cash interaction is safe and convenient.
Compliance with the terms of the contract is closely monitored.third parties, that is, bankers. If you use a letter of credit when purchasing real estate, then not only the parties to the transaction are interested in the correctness and legality of its registration. Credit organizations in this case are also liable in accordance with applicable law. In this case, it is guaranteed that the executing bank for payment will not accept fake or not fully completed transaction documents. When the guarantor of the transaction is a credit person, that is, a letter of credit is used when purchasing real estate, this is always a sign of reliability.
Lack of credit
While this form of settlement hasA whole range of positive aspects, there are certain disadvantages here. The document flow is rather complicated, since at each stage of the transaction its careful monitoring is required. Registration of the letter of credit and operations on it is usually accompanied by the need to pay the commission. Usually its amount depends on the amount of the transaction.
Why not used
Few people now use when buyingreal estate letter of credit. Sberbank has long been offering its customers to use such a secure service. This form of settlement is often compared with the use of bank cells, however, it is used much less often. The methods have similarities, but there are also strong differences. The use of the cell implies the availability of money in the physical manifestation, and for the second case it is non-cash payments, and this is the letter of credit. Sberbank provides both options, but most often customers stop at the first one.
This is due to many moments.The depositing of funds by the client into the banking cell is done in secret, that is, he does not disclose its contents to the bank. In this case, the seller can not be confident in the integrity of the buyer. And in this case, the bank does not bear any responsibility, even if the contract of sale has already been concluded. In this case, the letter of credit protects both parties, since the credit institution is responsible for any violations during the execution of the transaction.
Conclusion
Application when buying a real estate letter of creditpayment methods recognized by experts a good option. Banks are interested in the success of the transaction, so they will carefully monitor it at each stage.
