COD transaction


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COD transaction

Delivery versus Payment

A settlement procedure in which the buyer and the seller of a security agree that the seller will pay the buyer upon the security's delivery to the seller. This agreement is designed to reduce risk to both parties: if the delivery and payment do not occur at the same time there is a risk, however small, of theft by one party or the other. It is more commonly known as cash on delivery.
References in periodicals archive ?
In other words, when the property has recourse financing, the transaction is bifurcated into two transactions, a sale transaction and a COD transaction.
A majority of the COD transactions are paid in cash.
Ascertaining a property's FMV is particularly important in part sale, part COD transactions, and is difficult to ascertain when a lender agrees to take back property without an open market sale.