Options for transferring money when buying an apartment in Russia

Author of the article: Dmitry Lidov If you need free legal advice
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If you are planning to buy an apartment, house, land plot or non-residential real estate, a lot of questions arise regarding calculations under the purchase and sale agreement:

Should I pay cash or non-cash?
When to transfer money? At what point?
How to protect yourself as much as possible when buying real estate and not lose money?

We will tell you about the three best options for paying for real estate in terms of safety and proven practice for the buyer.

Payment options for an apartment purchase and sale agreement

The easiest way to transfer money when purchasing real estate is cash. Formally, the granting of property rights takes place during the period of state registration of the transaction, which is carried out at the Registration Chamber. However, the registration itself will be completed ten days from the date of submission of documents.

Payment upon delivery. In this case, documentation of ownership is carried out, and then cash payment.
Prepayment. This option involves the transfer of money before state registration of alienation of property rights.

Both methods have their drawbacks. In the first case, the seller has the risk of being left without funds and without real estate, and in the second, the buyer faces a similar risk.

A large amount of money provided in cash will be a good bait for robbers and scammers. It is worth finding out how to make cash payments and reduce all possible risks to a minimum. To do this, you can use the following recommendations:

The provision of funds must be confirmed with a receipt. In this case, the passport details of the recipient, the purpose of the transaction and the settlement amount are indicated.
It is not advisable to go alone with a large amount of money.
The buyer must choose the place where funds will be transferred independently. It is better to carry out this procedure in a public place where there are surveillance cameras.

It is worth understanding that the transaction can become more secure with the help of a third party. A realtor will not be reliable, so it is better to contact a bank or real estate agency. This is due to the fact that large and long-established institutions will not risk their reputation. In addition, the buyer in this case can find out how reliable the service representative is.

A banking institution may accept cash for safekeeping during the transaction and transfer of ownership. This happens on two grounds:

Personal safe storage. In this case, contractual obligations arise between the recipient of funds and the bank. The seller of the apartment receives the key to the locker that contains the payment. In this way, both parties protect themselves from the risks of losing money or real estate.
Responsible storage. In addition to creating the main agreement, an additional agreement must be signed. It provides identification data of a citizen who has the right to withdraw money from the cell after the transaction is completed.
Conclusion of a tripartite agreement. It is signed by the buyer, seller and bank. The contract divides the terms of access to a specific cell between the participants so that they cannot overlap. The seller will be able to withdraw his funds five working days after state registration. In this case, the bank must provide confirmation that all agreed obligations have been fulfilled. If the period has expired and the buyer has not received the apartment, he can return his funds.

It is worth noting that it is better to place money in a safe deposit box with the participation of the seller. This will help avoid doubts about the amount of funds, the terms of the contract and the authenticity of banknotes.

Cash transfer of money when selling a home is still the most popular payment method in Belarus. Banknotes need to be checked by a specialist. Banknotes that are torn or damaged by fungus must be replaced. The bank will charge a commission for the replacement. The replacement procedure lasts from days to months.

The authenticity of banknotes is checked using special equipment - detectors. You can check the banknotes at a bank or real estate agency. If the transaction goes through an agency, clarify in advance how the bills will be checked.

Random selection of the payment location is a serious mistake of many sellers and buyers. Often the settlement takes place in the apartment being sold without witnesses, or in the interior of a car near the BTI or notary office.

Remember the rule - do not carry out calculations in a place with a lot of people. The following are absolutely not suitable for these purposes: shopping centers, restaurants and cafes, parking lots, etc.

Do not tell anyone about your planned transaction except your most trusted people. Let them know your expected completion time. This way, your loved ones can raise the alarm if you stop communicating.

On the day of transferring money, avoid using public transport. If you plan to use a taxi, call the car not to the address of the BTI or notary office, but to the addresses of nearby houses.

We recommend that you conduct the transaction in a safe place with the assistance of a specialist, such as a realtor or bank employee. The meeting room of your real estate agency, bank or registrar's office is suitable for signing documents and further settlement.

Making an advance or deposit in a large amount, even confirmed by a receipt, is associated with serious risks. The transaction has not yet been completed and ownership of the apartment has not been transferred, but a large amount has been paid. You should not transfer more than 5% of the cost of the property as a deposit or advance payment. It can be very difficult to collect the advance amount from the seller if he refuses the transaction. It is especially difficult to get the money back if the apartment being sold is the only property of the seller and he has no official income.

In the purchase and sale agreement or in the act of acceptance and transfer of real estate there is a clause stating that payments have been made in full. A receipt for the transfer of the entire amount, handwritten by the recipient of the amount of money, will not be superfluous. It can be used as written evidence if necessary. If you deposit money in parts, each of them must be confirmed by a receipt from the recipient.

If representatives of a real estate agency are not involved in the transaction, then it is necessary to find several witnesses. We advise you to find 2 witnesses who will sign a receipt for the transfer of money. These people will be able to confirm in the event of a dispute that the transaction has been completed and payment has been made in full. And the receipt will serve as written evidence of the fact of the transfer of money, and not the fact of the conclusion of the transaction.

Payment in foreign currency

The legislation provides for settlements between citizens only in Belarusian rubles. The purchase and sale agreement may provide that payment under it may be equivalent to a certain amount in foreign currency. In this case, the amount payable in rubles is determined at the official exchange rate of the relevant currency or the rate established by agreement of the parties.

The desire to pay in foreign currency is one of the main motives for paying in cash for many sellers and buyers. The instability of the ruble exchange rate has long taught Belarusians to store large sums in hard currency. To pay in rubles, the buyer must pay for currency conversion. The seller is also interested in storing a large amount in foreign currency, and also bears the cost of converting rubles. For an amount of $100,000, two such conversions could cost $1,000.

This is how a motive is born. In the agreement, the parties to the transaction indicate rubles, but in fact transfer the currency without conversion. It is extremely difficult to prove the actual payment in foreign currency, which is what enterprising citizens take advantage of.

In the worst case, when paying in foreign currency, the money for the apartment will be confiscated and a fine of 50 to 100 basic units will be imposed. This is provided for in clause 1.2. Decree of the President of the Republic of Belarus dated 02/09/2015 No. 49. The transaction itself could potentially be declared void as not complying with the law in accordance with Art. 169 of the Civil Code of the Republic of Belarus.

Making non-cash payments in foreign currency when purchasing apartments is also prohibited. Law enforcement agencies will be able to easily calculate such a calculation. You already know the consequences.

We recommend signing the purchase and sale agreement and paying in the presence of a notary or registrar. Indicate in the agreement that the payment was made before signing, and that the agreement has the force of an act of acceptance and transfer of real estate in accordance with Art. 527 of the Civil Code of the Republic of Belarus. Copies of the purchase and sale agreement signed by the seller are exchanged for a sum of money from the buyer. After which the contract is signed by the buyer and certified by an official. This will eliminate the possibility of abuse.

It is important to understand that in the office of the registrar and notary there are no conditions for counting and checking banknotes. You need to calculate and check them in advance. After calculating, you need to seal the exact amount to be paid for the apartment in a pre-prepared envelope. Sign the parties on the envelope and seal it so that it cannot be opened without visible damage.

The seller and buyer first enter into a purchase and sale agreement with the registrar with the condition of payment within one day after signing. Ownership rights remain with the seller until the signing of the transfer and acceptance certificate of the apartment. After this, the seller and buyer make a payment at the bank. There are various options here:

Money can be withdrawn from the buyer's bank account and transferred in cash to the seller. The act of acceptance and transfer of real estate is signed by the seller simultaneously with the receipt of money.
The best option is when the buyer exchanges the currency for rubles, and the seller immediately purchases the desired amount of currency. Each party retains bank documents confirming the legality of the payment. All that remains is to minimize conversion losses. We help our clients find the best conversion conditions, usually about $150 per $100,000, or $75 per side.

After payment, the buyer with the deed independently applies to the registrar to obtain a certificate of state registration of the transfer of ownership. To do this, the contract must provide for the right of the buyer to submit documents for registration without the participation of the seller.

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.

Ekaterina Belyaeva, marketing analyst at BFA-Development CJSC, answers:

There are several options for transferring cash in an apartment purchase and sale transaction. The first option is convenient and profitable for the seller, but risky for the buyer. However, this method is used quite often. The money is transferred to the seller after the contract is drawn up and signed, but before the documents are submitted for state registration. In this case, an act or receipt is drawn up with the contract stating that the required amount has been transferred in full, and the seller has no claims against the buyer. In order to reduce the buyer’s risks, it is better to carry out this transaction in one day, and the next step is to visit Rosreestr with the transfer of all documents for re-registration.

In the second case, the money, by mutual agreement, is transferred in the premises where the transaction for re-registration of property rights is taking place. However, in this situation the seller is at risk, since there is no possibility of recalculating and verifying the funds received.

The third option involves settlements between the parties using a safe deposit box and is especially often used by realtors when supporting transactions. With this method, a tripartite agreement is signed between the seller, the buyer and the bank providing the service. After a thorough banking check, the money is deposited in a safe deposit box and given to the seller only upon presentation of a document specified earlier in the agreement (this agreement certifies the fact of the sale and re-registration of ownership to the buyer) and confirms the right to open the safe deposit box and own the cash in it.

The fourth option for transferring money is non-cash. If you decide to go this route, remember: a number of financial institutions take a percentage of the transfer amount. This percentage can be quite significant, provided that the accounts of the buyer and seller are in different banks.

Text prepared by Maria Gureeva

Do not miss:

How to safely make cash payments?

The parties choose in advance the bank that is most profitable for each other with minimal transfer fees. Agree on the distribution of costs, including conversion. The seller opens a current account in Belarusian rubles in the selected bank.

An important nuance when choosing a bank is that the exchange rate should be favorable for the seller and the buyer. It is this rate that must be used to link the cost of the apartment in equivalent. As a general rule, BTI uses the rate of the National Bank of the Republic of Belarus in the text of the contract; if it is used, the seller will not receive the desired amount in foreign currency. The bank sells currency at a higher rate than the rate of the National Bank of the Republic of Belarus.

Having chosen a bank, the parties apply to the BTI for the preparation and certification of a purchase and sale agreement with non-cash payment after signing. This is where the seller's account opening agreement comes in handy. Current account details are included in the text of the purchase and sale agreement, and the deadline for transferring money is indicated. It is better to take at least 5 banking days.

The buyer transfers money to the seller's bank account. When the funds arrive, the parties meet and sign the transfer and acceptance certificate, after which the buyer registers the transfer of ownership in his name with the BTI. This is a safe method of payment - there is no need to move around the city with a large amount of cash, and the fact of payment is confirmed by a bank document. The downside is losses on commissions for transfers and currency conversion.

Now you know how to avoid making mistakes when making calculations in an apartment purchase and sale transaction. Choose the most suitable payment method and act.

All that remains is to agree on everything with the seller or buyer. It is in such negotiations that a lot of real estate work lies. It is necessary to maintain a balance among dozens of requirements and conditions of the parties. This can be very difficult to do. Especially if there is a chain of transactions related to each other, when the seller of an apartment becomes the buyer of the opposite property and so on.

Share the article on social networks, it may help your friends. And you can always find it when you need it.

We wish you successful negotiations and an easy transaction!

Let's consider what methods exist and which of them are the most acceptable and safe for both parties to the transaction.

The most popular method of transferring funds for a purchase is cash payment, but without directly transferring the money “into the hands” of the seller, but using a special safe deposit box in the bank.

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 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.

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, it is mandatory to provide an extract from the house register confirming the absence of registered persons in the apartment being sold.

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.

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.

Please note that Part 3 of Art. 327 of 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 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.

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.

Selling an apartment always entails the need to handle large sums of money, which often amount to millions of rubles.

For this reason, both parties to the transaction must show maximum responsibility and care when performing a settlement transaction, so that in the future:

don't get a lot of problems;
do not bring the matter to a grueling trial.

If you are interested in the security of the transaction and your property (apartment or money), read this guide to understand how the transfer of funds is carried out and what are the most reliable ways to do this.

Making a deal

In order for a transaction to take place between the buyer and the seller of an apartment, several stages must be completed, which will gradually lead both parties to the signing of the main agreement for the sale of the apartment and subsequent payment using one of the methods.

The transaction can be completed either independently or with the direct participation of a real estate agent, who will help in solving various issues and problems, including those related to paying for the purchase of an apartment.

Procedure

Transferring money when selling an apartment is far from the only stage of selling a home.

You should know that when selling an apartment with a mortgage, this list becomes more voluminous.

In addition to the agreement for the sale of an apartment, which must contain all the necessary information about the property, the parties involved and the transaction amount, other documents are needed:

passport;
consent of the spouse to sell real estate (if the apartment is sold during marriage);
document establishing the right to own housing;
technical passport of the apartment;
extract from the Unified State Register and house register;
appraisal certificate for sale with a mortgage.

The buyer will only need to collect the first two documents (if the purchase is without a mortgage).

The process of transferring funds when selling an apartment can be carried out in various ways, but regardless of the chosen path, care must be taken.

Only your vigilance will help you carry out the transaction correctly and not be left with nothing, don’t forget about it!

Cash

The most dangerous and unreliable method of mutual settlement, which has the following disadvantages:

money can simply be stolen during the process of delivering it to the place of transaction;
some or all of the banknotes may turn out to be counterfeit; this cannot be checked at home;
the buyer may not provide the entire amount, and it will take a very long time to count.

It is necessary to choose a cash method of mutual payment only if a trusting relationship has been established between the buyer and the seller.

The transfer of money should also not be carried out in a public place, and the transaction itself should not be disseminated to others.

Through the cell

Safe transfer of money when selling an apartment

in cash from hand to hand before providing documents for state registration;
in cash from hand to hand after the transaction is completed;
to a bank account before performing the operation;
transfer of money from the buyer’s bank account to the seller’s account, which is available for transactions in Russia and abroad;
transferring money through a real estate agency;
sending funds to the seller’s bank account after the transaction is completed;
transfer of funds through the depository cell of a banking institution;
using a letter of credit.

Each of these options has its own nuances, so they are worth considering in detail. This way, you can choose the most suitable safe methods of transferring money when buying an apartment and not make a mistake.

Verification procedures are carried out in the presence of the transaction participants, after which the funds will be packaged and sealed. Basically, payment for services is borne by the buyer. But this issue is resolved between him and the seller of the apartment individually. The procedure for recalculating and verifying funds is agreed upon with the bank in advance.

The buyer does not have the opportunity to cancel his decision without the seller's consent. This obligation is guaranteed by the bank that issued the letter of credit. They also check the accuracy of the documentation provided by both parties. This method can be used not only by legal entities, but also by individuals who are legally capable.

At the same time, the institution’s staff will monitor:

carrying out the transfer of money from the beginning of the transaction to its completion;
transfer of funds issued by the bank;
methods of transferring money, which in some cases are not controlled.

You should find out in detail how money is transferred when buying an apartment with a mortgage.

In such a situation, the bank independently chooses the method of transferring credit money and will control this process. It is not profitable for an institution to change the procedure for carrying out this procedure because of one case. For this reason, if the buyer is not satisfied with everything, the bank will advise the borrower to look for another property.

Before contacting the bank, it is worth finding out how money is transferred when buying an apartment with a mortgage, and what is best to choose. There are four ways:

using a deposit box;
letter of credit;
in cash before submitting prepared documents for state registration;
by bank transfer to the seller’s personal account, which is done after registration of the purchase agreement and mortgage.

The transfer of money when buying an apartment in the first three cases was discussed earlier, so it is worth paying special attention to the last option.

This option involves transferring borrowed money to the seller’s account. In this case, the remaining amount will be transferred by personal agreement between the buyer and seller. For example, it is worth finding out how money is transferred when buying an apartment with a mortgage from Sberbank before contacting this bank in order to avoid troubles.

This method contains a risk, which is that the seller entrusts the funds to the buyer's bank, because he will not see the entire amount before the transaction is completed. It is possible to partially transfer money when purchasing an apartment, that is, selling it for part of the cost. However, in practice, the bank often does not receive the funds due if it is closed during the transaction. It can be terminated if the conditions clearly stated in the contract have been violated.

The sales algorithm is simple - the buyer deposits money into his account and, at the time stipulated by the agreement, transfers it to the account of the former owner of the apartment. It all depends on the buyer, since it is he who is authorized to manage the funds in his account.

The considered method does not carry any risks for the buyer and, conversely, great risks for the seller, since the fact of timely transfer of money is not ensured by a third party. After the transfer, the buyer will be able to receive a transfer certificate from the bank - in other words, there is no need to draw up a receipt.

A bank transfer does not require the conclusion of an additional agreement with the bank - it is enough to use an existing account. It must be remembered that the bank will require a commission of approximately 1% of the transfer amount. The term for crediting money to the seller depends on the internal rules of interbank cooperation and takes up to 5 business days.

Pros: available to every participant of the PrEP, does not require the conclusion of additional agreements.

Disadvantages: does not guarantee the interests of the seller in any way, it is necessary to pay a commission, there are delays during the transfer.

Basically, the parties to the contract prescribe the conditions for using the letter of credit.
Based on the DCP and at its own request, the buyer asks the bank to open a letter of credit. In the application, he states how much money will need to be transferred, to what account and on what basis.
Based on the application, the banking organization opens a letter of credit account and blocks the required amount on it. After this, the seller will receive a notification from the bank about opening an account, crediting funds to it and the procedure for receiving them.
Next, the DCT is submitted for registration to Rosreestr, after which the parties receive their copies of the agreement with a registration mark.
With the ready and registered DCT, the seller goes to the bank, which checks compliance with the terms of the transaction and then transfers the money to the recipient.

It turns out that until the sale of the apartment, the money is transferred by the buyer to the bank, which guarantees its safety in its account. After registration, the seller receives them by presenting supporting documents. If registration does not take place, the money will be returned to the buyer.

The cost of opening a letter of credit varies from bank to bank; approximately this service costs from 2,000 to 15,000 rubles. The period for transferring money also depends on the internal rules of the bank; the approximate time frame for checking documents and transferring money to the seller is 14 days.

Pros: a very safe payment scheme - the bank controls the correctness of the transaction, the funds on the letter of credit are insured for the amount of 1.4 million rubles.

Disadvantages: high cost - the service can cost much more than a conventional safe deposit box.

The parties enter into a locker rental agreement with the bank. This can be either a tripartite agreement or an agreement between one of the parties to the agreement and the bank. The agreement specifies the lease term and the actions that the recipient of the money must take.
On the day of signing the agreement, the parties and a bank representative gather at the bank. At the time of signing the main purchase and sale agreement, in the presence of the second party and a bank representative, the buyer deposits money in the safe deposit box. The cell closes.
Next, the parties submit documents for registration to Rosreestr, after which they receive a DCP with a department mark.
Based on this agreement, the former owner of the apartment can receive his money from the bank.

Thus, during the entire period of state registration, funds are stored in a safe deposit box without access to them by the parties to the agreement. This is a fairly safe payment scheme.

The seller can receive money almost immediately after state registration of the property. The cost of renting a cell is approximately 2,000 rubles and depends on the bank’s tariffs. If the transaction does not go through, the buyer will be able to withdraw the money within 7 days from the date of termination of the lease.

Pros: safer than cash transfer and bank transfer, quick time to receive money after registration, low cost.

Disadvantages: the bank does not control what the parties put in the cell, it simply provides it to the parties for use, the money in the cell is not insured.

The cost of this service is 0.5% of the accepted monetary amount, but not less than 1000 rubles. If the parties certify the DCT with a notary, then settlement through a deposit will cost them 1,500 rubles. The transfer period is also short - the due money will be transferred to the seller within 3 business days from the date of submission of supporting documents.

Pros: high security of payments at a fairly low price; registration is quite simple.

Cons: none identified.

Down payment from the seller's funds.
Final settlement with mortgage funds.

For the first payment, the parties have the right to choose any payment method - cash against receipt, through a safe deposit box, letter of credit or notary. Most often, this is formalized as the transfer of a deposit (advance payment) as part of a preliminary agreement.

The transfer of the second part is very often determined by the bank itself, since it is interested in the successful execution of the monetary policy. You can also transfer money to the seller using one of the methods provided by law, but in practice, a transfer or a safe deposit box are most often used.

In terms of timing, final payment, as a rule, always occurs after state registration of real estate in the name of the buyer and collateral from the bank. This carries a certain risk for the seller, since for the period after registration and until the money is received, he is left without funds and without an apartment. To mitigate this risk, it is necessary to use the services of only trusted banks with a high rating.

Today, there are two ways to calculate how to most safely receive money when selling an apartment:

Through a notary's deposit.
Through a letter of credit.

Both of them require the presence of an active intermediary who controls the execution of the transaction and the correctness of the documents. In addition, the funds on the letter of credit are insured, which will protect them in case of troubles with the bank. At the same time, compared to a letter of credit, a notary’s deposit has a great advantage - this service is much cheaper.

To avoid difficulties and conflict situations when transferring money for an apartment, you need to choose safe payment methods and specify them in detail in the DCP. Then there will be no difficulties during the transfer of housing, and the interests of the seller and buyer will be maximally protected.

You can find out more about how to sell an apartment yourself without a realtor and check its legal purity below.

We will be grateful for your like and repost.

The secure transfer of money is carried out taking into account the interests of both parties, when the seller and buyer receive mutual guarantees of the absence of risks and negative consequences.

Procedure

Do I need a receipt?

The well-established opinion about the need to draw up a receipt when making payments between the seller and the buyer is relevant only in the case of transferring funds in cash “from hand to hand”. In other situations - when renting a safe deposit box, opening a letter of credit or an escrow account with the buyer, there will be sufficient evidence of fulfillment of obligations under the contract without it.

Is it possible to safely transfer money when buying and selling an apartment? The technical side of the issue leaves no doubt - a responsible financial institution is able to carry out settlements without significant financial risks. However, without control over the purchase and sale transaction itself and its legal transparency, even a correctly made payment will carry serious risks.

In order to avoid troubles associated with the invalidity of a transaction or fraud, the parties are recommended to seek the help of lawyers on our portal. An introductory consultation on the issue is free.

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Transferring money for an apartment is a crucial moment and this procedure must be carried out competently so as not to lose money. In this article you will receive complete information about safe payment methods.

Costs of keeping money in a safe deposit box

Procedure

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.

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.
For DPA (share participation agreements), since 2020, 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.

Registration of ownership

After the transfer of money has been completed when purchasing an apartment, the buyer must register ownership of the property. If the transaction occurs with the help of third parties, for example a real estate company, this procedure is their responsibility. Otherwise, the buyer must take care of this independently.

When learning about how money is transferred when buying an apartment in a new building, you should understand that when purchasing with a mortgage, the procedure will be handled by a notary. This is due to the lack of material benefits for the bank. You can also contact the relevant companies that will help the buyer in this matter.

Pavel Balyuk, a lawyer from the Real Estate practice of the Legal Studio law firm, answers:

Most apartment purchase and sale transactions are carried out using safe deposit boxes. This payment method implies that the buyer has entered into a lease agreement with the bank for a safe deposit box, where a sum of money is deposited with the condition that the seller has the right to receive it only upon provision of a certain package of documents. This could be a registered agreement for the purchase and sale of an apartment with a mark from the registering authority or an extract from the Unified State Register, where the buyer would be listed as the owner of the apartment. Also, from January 1, 2015, the use of a notary’s deposit account became available. This method implies that the transaction will be completed in notarial form, and the funds will be transferred by the buyer to the notary's deposit account. In this case, the submission of documents for state registration will also be the responsibility of the notary, and the funds will be transferred to the seller only after the notary receives information about the registration of ownership of the buyer.