Enlarge imageLetter of credit agreement

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In such a situation, a letter of credit agreement will relieve the buyer from the fear of losing their money without ever taking legal possession of the apartment, house or summer cottage. After all, the seller will receive the money only after the transfer of ownership to the buyer, which must be registered with Rosreestr.

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A letter of credit agreement is often used in real estate transactions
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What is the difference between a letter of credit and a bank guarantee, a safe deposit box and an escrow account
If we talk about buying real estate, a letter of credit is similar in its functions to an escrow account, without which it has been impossible to purchase an apartment under a shared participation agreement since 2019.

But they are rarely interchangeable. The first is more convenient for purchasing secondary housing, it is easier to open, because one of the parties can do it. Whereas it is impossible to open an escrow account without the direct participation of all parties. In this case, the bank that controls the transaction always acts as one of them. In the case of a letter of credit, it is only an intermediary and is not responsible for the execution of the agreement on the basis of which the account is opened.