The world is now a global village in its entirety, and it’s no wonder that cross-border investments and purchases of important assets such as real estate have become so prevalent. However, it’s a daunting task to navigate the complexities of international payments. Even experienced investors often must keep tabs on several information sources to avoid mistakes.

In this newsletter issue, we look at the world of cross-border digital payments for real estate investment. What payment methods should you consider when carrying out these types of transactions? And what are the pros and cons of each method? This will help you make informed investment decisions as you go.

Types of Payment Methods for Real Estate

Wire Transfers

These are traditionally considered the most widely-accepted method for cross-border payments. They are also highly secure since they involve direct bank-to-bank communication and require proper authentication and verification processes. All things being equal, an international wire transfer should be settled within a few days, depending on the banking systems of the countries involved. For dealing with large transaction amounts, which is typical in the real estate industry, wire transfers are highly recommended.

Escrow Services

With escrow services, a neutral third party holds funds or assets until specific conditions are met. This provides an extra layer of trust and security, a critical measure when it comes to transactions across countries, which involve multiple parties, different currencies, and different, often diverging, legal and regulatory requirements. The escrow service also acts as a mediator in case of payment disputes.

Escrow services add an extra layer of security in cross-border real estate transactions by having a neutral third party hold funds until all conditions are met. This is especially important when dealing with multiple parties, different currencies, and varying legal requirements across countries. The escrow service also helps mediate disputes that may arise during payment processes. Breinrock, with its expertise in this area, offers specialized escrow services tailored for real estate professionals navigating these complex international transactions.

Electronic Funds Transfers

EFTs are a broad category of electronic payment methods that facilitate the transfer of funds between bank accounts. They are typically faster and more efficient than traditional wire transfers, as they leverage advanced electronic systems and networks for fund transfers. They also typically have lower transaction costs, especially for larger amounts. Many institutions support EFTs today, but specific features, processing times, and fees can vary by country and institution.

Crypto

The use of cryptocurrencies, such as Bitcoin or Tether for cross-border real estate investments is an emerging trend. While not yet widely adopted and still subject to controversies in various countries, cryptocurrency transactions have enormous advantages, including speed and global accessibility. Crypto transactions also offer a degree of anonymity, which may appeal to certain investors.

Various factors are at play in determining if you should choose one option, including transaction fees, speed, security, and regulatory compliance. Also, the regulatory framework across cross-border payments is constantly changing and evolving. As you embark on the next steps in your real estate investment journey, Breinrock can facilitate with our lending partners and escrow accounts – reach out to us today through LinkedIn and at [email protected]