Letters of credit for individuals buying pre-owned housing now available via SberBank Online
Sberbank has marketed letters of credit that can be opened remotely using SberBank Online for retail customers signing deals in the market for pre-owned housing. From now on, you can pay for housing fully online.
The routine is simple: a Sberbank partner — a real estate agency or realtor — sends transaction parameters to the bank using secure electronic communication channels. After that, the bank creates an LOC application, which can be accessed via the SberBank Online mobile application. All a customer needs is to open the application, read the terms and conditions, and confirm the opening of an LOC.
At all stages of the transaction, the payer and the recipient of the letter of credit receive SMS notifications that the application has been formed, the letter of credit has been opened and then executed. The first online transaction under the new scheme has already been carried out in Moscow with the participation of the real estate agency Etagi.
A secure settlement instrument such as a letter of credit is becoming more and more popular in real estate sales. In 2020, more than 150,000 LOCs were opened at Sberbank for such transactions, which is twice as much as in 2019. To make the use of this product even more convenient, last year we made the registration of LOCs available online for buyers of real estate in new buildings, and now it’s available for transactions in the pre-owned homes market. We are the only bank in Russia that offers remote LOCs for transactions between individuals. This reduces the time of a transaction dramatically because customers do not need to go to the bank
Director of Trade Finance, Sberbank
To join the service, real estate agencies and realtors need to send an application to email@example.com.
What is a letter of credit?
A letter of credit is a bank service that helps you not to worry about the outcome of a major transaction. Sberbank assumes responsibility for conducting non-cash payments: the funds are placed by the buyer in a letter of credit account with the bank and are received by the seller only after the latter fulfills the terms of the transaction. This is a safe and quick way to protect the interests of all participants in a major transaction in cashless payments.
LOCs are great if you sell or buy real estate (including a mortgage); exchange apartments (participate in a string of real estate contracts); sell or buy expensive property (for example, equipment, cars, securities, shares in the authorized capital); pay for expensive services (provided by individuals or companies).There’s more on LOCs on the bank’s website.