Transferring Funds When Closing on a Home in Lynn- Cashier’s Check vs. Wire Transfer

One of the most important elements of closing on a home in Lynn is ensuring that good funds are properly transferred from you – the buyer – to the closing attorney for the transaction.  It is important that you prepare funds at least 24 hours in advance, and that you come to the closing table with certified funds; personal checks are not acceptable. Typically, there are two ways to pay for your home: A direct wire transfer or a cashier’s check.

What Is a Wire Transfer?

A direct wire transfer is usually the easiest and surest way of guaranteeing that funds are transferred properly and in full. With a wire transfer, funds are transferred by your bank directly from your account to another (the closing attorney’s conveyancing or IOLTA Clients’ Funds account). The biggest benefit of a wire transfer is that once it is completed, you know for certain – as does the closing attorney and/or title company – that funds are secured, immediately available and that a check will not bounce.

You will need to organize a wire transfer in advance – waiting until the day of the closing to request a wire transfer may result in a delay.  While same day wire transfers can occur, it is advisable for you to visit your bank or financial institution at least a few days before to find out their wire transfer process.  Usually, it is as simple as sitting with a customer service representative and completing and signing a wire transfer form.  You must have the wire instructions of the closing attorney before you institute your wire transfer but these instructions are usually easily available from the closing attorney’s office.

The Benefits and downside of a Cashier’s Check

The other option for transferring funds when closing on a home is to obtain a certified cashier’s check. A cashier’s check means that before it is issued, the bank certifies that you have the funds in your account and that deposits have cleared. Then, the bank will make out the check and sign it. Cashier’s checks are a good option, but they are not foolproof.   The biggest pitfall is that certain banks may place a “hold” of 7-10 business days on the funds.  This means that the funds are not readily available for that period of time and therefore, you cannot complete the closing of your property.  It is recommended to that you contact the closing attorney’s office and determine if the closing attorney prefers a cashier’s check or a wire transfer.  Generally, if the funds that you need to bring are under a certain sum of money, most banks will make the funds readily available.  You should also check with your bank or financial institution to determine their threshold for putting a “hold” on certified checks.  Additionally, many people make the mistake of having a cashier’s check made out to the seller. You need to have the check made out to you, and then sign it over at the closing attorney. Or you could have the check made out to you or the closing attorney.

What Should I Do?

When closing on a home in Lynn, you should talk to your attorney and/or the closing attorney concerning the transfer of funds. The attorney should advise you on the preferred method of payment, and remind you that you need to secure payment before closing day.

For all other closing questions and a review of all documents, be sure to consult with an experienced attorney. Closing on a property can be complicated, and a small error can result in delays or, in the worst case, liabilities or losses. For your free consultation with a real estate attorney with over 30 years’ experience, contact Deborah Gold-Alexander, Attorney at Law, online or by phone today at 781-289-4235.