You've likely been anticipating making the final purchase of your dream house for some time if you're ready to do so. After months or even years of looking for properties, getting financing, negotiating over prices, and other activities, all that stands between you and those new house keys is for you to sign the final check over to the title company or escrow firm.
You'll want to ensure the transaction goes smoothly because there is so much at stake at this stage. Read on for a comparison between cashier's checks and wire transfers, as well as details on how each payment method works, its benefits and drawbacks, and which will make it the quickest and easiest for you to move into your new home.
Truth versus fiction
There are two widely circulated misconceptions concerning these options. First off, fraud cannot be committed using cashier's checks.
Why Cashier's Checks Are Used
A check your bank or credit union issues to the proper beneficiary is a cashier's check. As the account holder, you must personally visit your financial institution, show identification, and request a cashier's check from the bank teller. Although the bill is drawn against the financial institution's money rather than yours, you are still required to have the check's total amount cleared in your account as insurance for the institution.
Cashier's checks come with certain risks.
A cashier's check could be challenging to obtain. They are susceptible to fraud; criminals may alter them or utilize them in several cunning schemes.
The recipient's portion of the agreement is frequently affected by this risk, but a payor should be aware of potential adverse consequences.
Financial Organizations
Money is transferred directly from your banking institution to the payee using wire transfers, eliminating the intermediary and the need for checks. Wire transfers used to be sent via telegraph, but most are now carried out electronically. They typically take a day to complete and are relatively speedy. Many financial organizations use SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, to send these encrypted messages.
Wire transfer potential drawbacks
Wire transfers might occasionally take a few days or longer, even though they are frequently speedy, especially if you send money abroad. Depending on the financial institution, the cash may need to be transmitted to an affiliated or partner institution, delaying receipt. The wire might also require authorization before transmission.
What Certified Funds Are and Why Closing Agents Need Them
Imagine you have a general mistrust of banks and would prefer to arrive at your home closing with a significant sum of cash and lay it on the table. Unfortunately, closes don't want the responsibility of controlling so much money. Additionally, the Internal Revenue Service must be informed of any financial transactions that total more than $10,000.
The buyer pays a down payment.
Title firms, escrow officers, and other closers must have the equivalent cash on hand before recording a deed. These people represent both the vendor and the buyer. They promise the buyer will pay the seller following the act's recording. The buyer promises to record the deed when they deposit the monies.
Funds received via wire transfers are typically available for quick payment, whereas cashier's checks must be deposited the day before being disbursed. Any more payments will be made afterward.
A Word of Warning
Regardless of the closing method, make sure the money comes from a source that has already been verified by all parties involved in the house transaction.
In other words, resist the temptation to employ a quick fix, such as having a friend write a check or using an unreliable wire transfer service at the airport. A home closing is a significant transaction, and there isn't much room for error in the concluding phases of the process.
When does a real estate transaction close?
If there is a mortgage involved, closing on a house typically takes 30-45 days. It can take longer if there are issues with the closing procedure or different types of mortgages. If, for example, the appraisal is less than the sales price, the buyer and seller may need to bargain and perhaps ask for a second appraisal.
What is a title company?
A title company certifies that the buyer has a clear, transferable title to the property. Without liens or other issues that can prohibit the sale of the property, a home has a clear title. The title company gives title insurance only after verifying the identification is clear.
