When purchasing a home, both parties have their own opinion about the financial transaction. There are 3 popular methods by which you can safely transfer funds: transfer and cash, safe deposit box and letter of credit. Which one is the most optimal for those who sell and for those who buy?
Wire transfer and cash payment
Transfer without cash to the seller’s account is the most popular method today, however, it does not provide any guarantees. The buyer may be deceived and not transfer the money after the transaction is completed, or, conversely, may remain deceived if he transfers the money in advance.
Cash payment for goods and services is becoming a thing of the past, and even more so, no one now makes such large purchases for cash. There are many convenient and secure payment options.
Letter of Credit
This method of transferring money is somewhat reminiscent of renting a safe deposit box in a bank, the only difference is in the use of non-cash funds. To carry out this operation, the buyer creates a bank account, and only after all conditions are met and the order in the documents is observed, the funds are sent to the seller. This operation will cost more than renting a safe deposit box, the reason is that the bank here takes a commission for all actions performed, but is also responsible for the security of the transaction at all times.
Bank safe deposit box
In order to eliminate the risk of being deceived, renting a safe deposit box in a bank is suitable for both parties. The purchase and sale agreement is activated from the moment the ownership is registered at the state level. There is a certain stupor here, the seller has not yet verified the exact availability of funds from the other party, in turn, the buyer is afraid to give the money away until he becomes the owner. It is in this case that a safe deposit box gives peace of mind to all participants in the process.
The keys to such a cell are kept, as a rule, by the person who purchases it, because the money is stored there. The rental is for one month and several weeks – this period is necessary for registration and admission, and in the event of force majeure there is the necessary margin of time to eliminate it.
When renting a cell, both parties sign all the necessary documents, which spell out all the conditions: for how long the cell is rented, who will have access to it, methods of receiving funds, conditions on the right to real estate. It also stipulates such a small detail as an agreement on payment for banking services. After all the necessary checks, the funds are placed in a safe deposit box and can be issued after all manipulations on the transaction are completed.
This entire procedure has been approved by many banks and users, since all participants in the sale are confident in the positive outcome of the transaction. Even if one of the parties wants to take possession of either real estate or money by deception, this will not work.