How to safely transfer money when buying an apartment in 2021

Article updated: July 29, 2021
Elena GrushinaRealtor with a legal education. Work experience - 12 years

Hello. In this article, I will tell you how apartment buyers can safely transfer money to the seller, what safe transfer methods are available, what documents will be required, and what nuances there are if the apartment is purchased with a mortgage.

If you need free legal advice, write online to the lawyer on the right or call (24 hours a day, 7 days a week): 8 (Moscow and region); 8 (St. Petersburg and region); (all regions of the Russian Federation).

Basic Rule

I always advise buyers to ensure that the seller receives money for the apartment only after registering the purchase and sale transaction . The methods that I described below are based precisely on this rule. In addition, sellers readily agree to these methods, because their interests are also protected here.

Safe ways to transfer money

In all 3 methods, payments for an apartment go through a guarantor-intermediary. With a safe deposit box and letter of credit, the bank acts as the guarantor; with a deposit account, the notary acts as the guarantor (if the purchase and sale transaction will go through him).

The main essence of settlements through a guarantor is that each party proves to each other that they are ready to enter into a deal. Before submitting the purchase and sale agreement for registration, the parties to the transaction contact a guarantor-intermediary, to whom the buyer transfers money for the apartment. Now the money is “frozen” for a certain period - the buyer will not be able to pick it up. By this he proves to the seller that he has fulfilled his obligation to pay. The guarantor will transfer the money to the seller only after registering the transaction, namely when he shows the registered purchase and sale agreement and/or an extract from the Unified State Register of Real Estate, where the buyer will be the new owner of the apartment. If for some reason the transaction was not registered and one of the parties refuses the transaction, the buyers take the money back after the end of the period.

Sample documents

(click on the pictures to enlarge them)

Sales and purchase agreement page with registration stamp

Extract from the Unified State Register of Real Estate

Guarantor services are paid. The law does not specify who should pay for it, so it’s up to buyers and sellers to agree. In my practice, it’s usually 50/50, because the guarantor protects the interests of both parties.

Method No. 1 - Through a safe deposit box (cash payment)

A bank safe deposit box is a small safe in a special bank storage facility (depository), which it rents out for storing any things - money, documents, valuables, etc.

The safe deposit box method is the most common - it is cheaper and less complicated. It is most convenient to pay through a cell if you are simultaneously selling your property and buying a new one. This is called alternative transactions, in common parlance - “along the chain”.

Most banks specialized in this service for real estate transactions. A bank employee will explain and document everything in detail. The parties only have to sign the necessary papers. In general, everything is adjusted and put on stream. Machines for counting and checking bills are also usually provided free of charge.

The cell rental service costs an average of 3,000 rubles. It is worth renting for at least 2 weeks, preferably for a month. You can extend your lease agreement at any time. Naturally, the size of the cell should be such that your cash fits in it.

Offers from banks

Rent of safes in Sberbank
Rent of VTB safe deposit boxes
Rent for real estate transactions in Alfa-Bank
Individual safe deposit boxes at Rosselkhozbank
Safe deposit boxes at Otkritie Bank

Other articles
Deposit when buying an apartment - how to transfer it correctly so that there are no problems with sellers later + what documents to sign Documents for purchasing an apartment on the secondary market - a complete and current list

Brief instructions

The buyer and seller go to the bank and rent a safe deposit box in the buyer's name. The buyer, in the presence of the seller, deposits money into the rented locker. The bank employee will draw up an additional agreement that the seller will be given access to the locker only after he shows the apartment purchase and sale agreement with a registration stamp and/or an extract from the Unified State Register of Real Estate. As soon as the seller brings these documents, he will be given access to the box and will be able to withdraw the money. Next, I advise buyers to obtain a receipt from sellers confirming receipt of money.

detailed instructions

Before signing the purchase and sale agreement, the buyer and the seller contact the bank, provide the employee with their passports and a sample purchase and sale agreement. Typically, the lease agreement and the act of acceptance and transfer of use of the cell are drawn up in the name of the buyer, but both parties can be tenants if desired.
Along with the lease agreement, the bank employee will draw up an additional agreement, which specifies the condition - the seller will have access to the locker only when he provides a sales contract with a registration stamp and/or an extract from the Unified State Register of Real Estate.
Rent of a cell and additional agreement are paid separately. Some banks require you to leave a certain amount as collateral for the key to the safe deposit box.
After paying for the service and signing the papers, the buyer and seller go to a special storage unit (depository). Buyers, in the presence of sellers, deposit money into a rented locker. I advise you to give the seller the opportunity to count the money so that there are no questions in the future. Typically, the bank provides machines for counting and checking the authenticity of banknotes free of charge. Next, the buyer closes the locker and keeps the key for himself. Now you can enter into a purchase and sale transaction.
After registering the transaction, each participant will receive their originals of the registered purchase and sale agreement, and the buyer will also receive an extract from the Unified State Register of Real Estate. Registration certificates have not been issued since 2016.
The participants in the transaction again go to the bank, where the buyer provides the employee with a lease agreement, and the seller provides a registered purchase and sale agreement and/or an extract from the Unified State Register for the apartment. As a result, the seller is given access to the cell and takes the money.
After the seller has received the money, I advise buyers to obtain a receipt from the seller. Only a receipt confirms the transfer of money, plus it will be required by the tax office when receiving a tax deduction for the purchase of an apartment. The receipt must be handwritten, in legible handwriting, dated and signed.
Sample receipt

Method No. 2 - Through a letter of credit (non-cash payment)

The method is similar to renting a safe deposit box, only here the money is sent non-cash to the seller’s account from a special letter of credit account. An account in the name of the seller can be opened in any bank.

Disadvantages of this method: 1) Higher cost of the service itself + additional transfer fees. On average it comes out to 7,000 rubles. 2) Doesn’t fit well with “chain” transactions; 3) Not all banks provide such a service; 4) Many bank employees do not have sufficient experience in working with letter of credit accounts, so they usually take longer to process everything and may make mistakes.

Banks that provide letter of credit services for real estate transactions

Sberbank
VTB
UniCredit Bank

Other articles
Who can challenge the deal after buying an apartment and how to protect yourself - listed the most common cases and how to protect yourself from them

Brief instructions

The buyer opens a savings account with a bank that provides the letter of credit service. Money is deposited into this account to purchase an apartment and an application is submitted to open a letter of credit. As a result, the money will be transferred to a special letter of credit account.

After registering the transaction, the seller provides the bank with a registered purchase and sale agreement and/or an extract from the Unified State Register of Real Estate. These documents prove that the registration was successful and the buyer became the owner of the apartment. The bank employee transfers money from the letter of credit account to the seller's account. An account in the name of the seller can be opened in any bank.

detailed instructions

The buyer deposits the money for the apartment into his savings account.
Participants in the transaction contact the bank and provide their passports, a sample apartment purchase and sale agreement and the seller’s details. The buyer signs an application for opening a letter of credit. The application must indicate the details of the seller and the condition - money from the letter of credit account will be transferred to the seller after he provides a registered purchase and sale agreement and/or an extract from the Unified State Register of Real Estate.
The term of the letter of credit should be set at least 2 weeks. Better for a month. You can extend it at any time.
Sample application for opening a letter of credit
Money from the buyer’s account will be transferred to a special letter of credit account and a statement of the transfer of funds will be issued. This statement proves that the buyer has fulfilled his payment obligation to the seller. The seller will be notified that a letter of credit has been opened in his favor. You can enter into a purchase and sale transaction.
After registering the transaction, each participant will receive their originals of the registered purchase and sale agreement, and the buyer will also receive an extract from the Unified State Register of Real Estate. Registration certificates have not been issued since 2016.
The participants in the transaction again contact the bank, where the seller provides the original of the registered sale and purchase agreement and/or an extract from the Unified State Register for the apartment. As a result, the money from the letter of credit account will be sent to the seller’s account, and the buyer will receive a confirmation document about the transfer.

Even though the buyer will receive a certificate confirming the transfer of money to the seller’s account, I still advise you to get a receipt from him - a sample. It won't be redundant.

Method No. 3 - Through a notary's deposit account (cash and non-cash payments)

The method is similar to a letter of credit, but a notary acts as a guarantor-intermediary in settlements and all transactions will go through his deposit account.

It is better to use this service only if a notary certifies the purchase and sale agreement. In this case, the service will cost 1,500 rubles (clause 8.1, clause 1, article 22.1 of the Fundamentals of Notaries) + an additional 1,000 - 3,000 rubles for legal and technical services.

If you are not going to certify the purchase and sale agreement, but simply use a deposit account, then the tariff will already be 0.5% of the transaction amount - pp. 8.2 clause 1 art. 22.1 Basics about notaries. For example, an apartment is bought for 5 million rubles, then the notary will have to pay 5 million * 0.5% = 25 thousand rubles. It is much cheaper to use a safe deposit box or letter of credit, and you need to provide much fewer documents than to a notary.

Brief instructions

The notary draws up a settlement agreement, which is signed by the parties to the transaction. All documents remain with the notary. The buyer then transfers the money to the notary's escrow account. Only after the notary ensures that the money has been transferred to his deposit account does he submit documents for registration. After registering the transaction, the notary transfers the money to the seller's account or gives him a check so that the seller can withdraw the money in cash from the bank.

detailed instructions

Buyers and sellers contact a notary and provide the necessary documents for the transaction and settlements. What exactly the notary will tell you, everyone has their own requirements.
If the buyer decides to transfer money to the notary's deposit account by bank transfer, then the bank account must be registered specifically in the name of the buyer. It will not be possible to transfer money to a notary, for example, from the account of the buyer’s mother. Exception: if one of the buyers is a minor, then money can be transferred from the account of one of the parents (guardian).
To prove that the account belongs to the buyer, you need to provide the notary with a certificate or a copy of the agreement for servicing the account. The same applies to the seller.
The notary's assistant will draw up several copies of the purchase and sale agreement + agreement on cash settlements.
Participants sign documents. Next, the notary will certify the purchase and sale agreement. According to Art. 1 of Federal Law No. 338-FZ dated August 3, 2018, the notary submits a purchase and sale agreement to register the transaction. The documents remain with him
The notary will inform the buyer of the deposit account details. The buyer, at his own discretion, transfers money there - from his bank account or in cash. In both cases, the buyer will be given a certificate confirming the receipt of money in the deposit account. With this certificate, the buyer proves that he has fulfilled his obligations to pay the seller.
Once the notary is satisfied that the money has been deposited into his escrow account, he will submit the purchase and sale agreement to register the transaction. Typically, documents are submitted electronically (electronic filing).
After registering the transaction, the participants again go to the notary and collect their documents from him. Sellers can receive money in cash or into a bank account. In the case of cash, the notary will issue a check or order to the sellers, with which they can withdraw money from the escrow account.

And again about the receipt. Even though buyers have a certificate of transfer of money to a notary's deposit account, I still advise them to obtain a receipt from the seller confirming receipt of money. You will find a sample at the link.

Prepayment methods

You liked the apartment and after several viewings, you decided to buy it. Often, to book housing, sellers ask for an advance payment. This is a guarantee for the buyer that the apartment will be his, and for the owner that the apartment will definitely be bought. Let's look at ways to make an advance payment.

Deposit

The buyer and seller enter into a deposit agreement . Indicate your full name, passport details, amount of advance payment and terms of return if the transaction does not go through. According to the law, there are several options for the development of events:

If the buyer is to blame for the failure, then the advance payment remains with the seller;
If the owner of the property refuses the transaction, then he returns the money to the buyer in double amount;
If no one is to blame, but force majeure circumstances arise, then the money is returned to the buyer.

Important! The contract must contain the word “deposit” and then the rules specified above will apply. Otherwise, the prepayment turns into an advance payment.

Prepaid expense

Despite the fact that the deposit carries certain guarantees, most often in the real estate market there is an advance payment that performs only a payment function. According to realtors, it is used in almost 90% of cases. Moreover, the term itself is not in any article of civil legislation.

If the seller refuses the transaction, then he must return the advance payment to the buyer;
If the deal is broken, the money remains with the person who sold it.

The advance is practically not protected at the legislative level. And if you meet an unscrupulous seller, you may be left without money. The advance does not oblige anyone to anything. Even if you draw up a written agreement.

Security payment

This option of making an advance payment appeared several years ago and has already firmly entered the real estate market. Realtors call it a hybrid of an advance payment and a deposit.

The very term “security payment” suggests that it must ensure the completion of the transaction. There is no obligation to return the money in double amount, but if the transaction does not take place, either party can return the money.

If it is the fault of the seller, then the buyer returns the amount;
If it’s the other way around, then the money remains with the owner.

Transferring money to the seller “in hand” before registering the transaction is unsafe

Some of my colleagues insist that without any safe deposit boxes, buyers spent their entire lives handing over money to sellers and everything went fine. I think so - if you can further protect yourself, then you shouldn’t waste money on it. Moreover, the sellers themselves willingly agree to the option with a safe deposit box, because the bank protects the interests of both parties.

If sellers insist on receiving the money “in hand,” for example, after submitting documents to the MFC or the Federal Registration Service, and not after registering the transaction, then I would think a hundred times about buying such an apartment. As a last resort, it is better to send money by bank transfer and be sure to obtain a receipt from the seller confirming receipt of money (sample).

Nuances if the apartment is purchased with a mortgage

If you buy an apartment with a mortgage, the bank transfers money to the seller by bank transfer only after registering the sale and purchase transaction. All these calculations occur in two stages. Buyers transfer money to sellers (down payment) through a safe deposit box (cash) or letter of credit (non-cash). The bank transfers the rest to the seller’s account some time after the transaction is registered, usually within 1 to 3 days.

Why is it better to use a safe deposit box or letter of credit when getting a mortgage? Because everything can be done in one bank, where the mortgage loan is issued. Most banks give discounts to their “mortgage holders” for using a safe deposit box or letter of credit. For example, with VTB, for a mortgage, a letter of credit costs 2,000 rubles instead of 9,000.

If you have questions, you can consult for free. To do this, you can use the form below, the online consultant window and telephone numbers (24 hours a day, seven days a week): 8 Moscow and region; 8 St. Petersburg and region; all regions of the Russian Federation.

When should you transfer money?

The first part of the money, that is, the advance payment, can be transferred by agreement. For example, when viewing an apartment for the second time, when you are convinced that you want this particular property and intend to book it.

If you have a mortgage deal, then it’s easier here. You make the first part, the prepayment, in advance to keep the apartment for yourself. The second part, the down payment, can be given to the seller at the time of the transaction. And the rest will be transferred by the bank. When he does this depends on the credit institution: either on the day of the transaction, or after the transfer of ownership.

If the transaction is not a mortgage, then the transfer of the remaining part of the money occurs by agreement of the parties. For you, as a buyer, it is important to transfer money after all obligations have been completed. That is, only after the transfer of ownership has taken place and you have become the official owner of the home.