What settlement schemes are possible when buying a property?
The first thing that any buyer of an apartment in a real estate agency will encounter when discussing settlement problems is the passive participation of a realtor in the scheme of transferring money from the buyer to the seller. That is, realtors of course calculate various options for paying for the cost of an apartment, but reality emasculated all the theoretical schemes and reduced them to one – settlements through a bank cell with special access conditions.
All other payment methods – from settlements at the entrance to the issue of letters of credit do not suit clients for one of two reasons – they are either unreliable or too expensive. Roads in the literal and figurative sense. Theoretically, the more legitimate the circuit, the easier it is to ensure its reliability. Typical of the real estate market is that the buyer and seller equally do not want to pay taxes or prove the origin of income. Realtor in such a situation can do little. In addition, he will not only be “extreme” in case of any problems with settlements, the method of which he recommended, but also with the clients risks falling under the pressure of the tax authorities if he is too eager to meet the client.
Possible calculation schemes:
Settlement through a bank cell
Bank Letter of Credit
Money is kept by a notary
Bank promissory notes
Valuable packages held in the bank depository
Valuable packages held at Rosinkass
Having chosen to transfer money from the buyer to the seller through a bank cell, you must stipulate special conditions for access to the cell in the agreement with the bank. The point is that, having received the key to the cell with money, the seller of the apartment can get permission to open the cell from the bank only by presenting the contract for the sale of the apartment to the buyer registered with the Department of Municipal Housing.
Payments through a bank cell are most popular. However, it is worth noting that this is far from a safe method. Details cases of fraud during cell operations are described in the previous issue.
Agencies used to take part of the risks, acting as the holder of funds or the organizer of white schemes, but the actions of the tax authorities led agencies to give customers complete freedom of settlement, leaving the right to recommend the simplest and most common one. Here and there are settlements with the storage of clients’ money at a notary public. The problem is that the notary himself must save this money somewhere and be responsible for exchange losses when terminating or delaying transactions.
In world practice, the separation of real estate activities from mutual settlements with clients is a common thing. Realtors do not deal with clients’ money in countries such as Austria, France, Germany, where settlements go through public institutions – trust accounts of courts or notaries. There, transactions are made within six months and the notary or the state registrar manages to check everything in detail. No one is afraid, no one is in a hurry, because after signing the agreement of intent, a person can already move and use his premises.
Ideally, banks should deal with settlements. In countries with a developed system of financial institutions, settlements on real estate transactions go through deposit or trust accounts.
It should be noted that recently the scheme of settlements through a bank cell has partially lost some of its attractiveness due to violation of the confidentiality of cells by the authorities. However, there is no alternative and working settlement scheme yet.