QUESTION: Transaction processing and registration: how to make settlements safely (letter of credit / safe deposit box)?

The security of financial settlements when buying or selling real estate is the top priority for both parties to the transaction. Traditionally, financial instruments such as a bank safe deposit box or a covered letter of credit are used for these purposes. The choice of a specific instrument depends on the terms of the transaction, the amount, and the agreements between the participants, but in any case, the procedure requires strict compliance with regulations.

To minimize any risks of fraud or transaction disruption, it is recommended to follow a proven scheme. At the first stage, it is necessary to determine the current point of financial readiness of the parties and agree on the procedure for accessing the money. At the second stage, a success metric is set, which means clear conditions under which the seller can access the funds after the registration of the transfer of ownership.

At the third stage, the parties choose suitable financial instruments, such as a letter of credit in a reliable bank or renting a bank safe deposit box with special access conditions. At the fourth stage, a strict deadline is set for each action to eliminate any dragging out of the process. At the fifth stage, it is recommended to automate regular actions as much as possible, for example, set up notifications about the receipt of documents or the status of bank transactions.

When using a letter of credit, the bank acts as an independent financial guarantor that will transfer the money to the seller only after the presentation of registered documents. When using a safe deposit box, the safe rental agreement includes the exact same disclosure conditions upon presentation of an extract from the USRN. This approach protects both the buyer, who will not be left without money and without an apartment, and the seller, who is guaranteed to receive payment.