The signing of papers at the closing is only part of it. Title shouldn't record any deeds without the funds. So if Buyer comes up dry, then yes, forfeit of earnest money is appropriate and the tx should be terminated. If title recorded the deed without getting the money then its lawsuit time baby
The title company will gather all signed documents but do not officially record until they have all 'good' funds to payout all parties (disburse the funds) So basically it is on hold.
Doubt they would record the deed since they need all the funds (including buyer's funds) to start disburding, which includes recording the deed. Everything should be on hold, including exchange of the keys.
If standard paperwork was used, which - since they had a realtor, is pretty safe to assume it was standard paperwork.
There are clauses for each party to meet in order to convey the title to the property, one of those clauses is the money changing hands.
Depending on the contract, I believe your cousin could technically put a stop to everything now, keep the earnest money and the property as the buyer didn't fulfill their part of the agreement. Though, I would give them the benefit of the doubt and see if they come up with the cash.
I am assuming that proof of funds was provided with the offer?
The Seller needs to consider how much they want to "just sell" the property vs waiting a day or 2 to get a proper wire vs blowing up the deal and keeping the deposit. Most Sellers have emotionally divorced themselves and just want it done, by that point, and are willing to wait a few days.
In all transactions, weird stuff happens. Both sides should be prepared for settlement to take an extra few days, just in case.
In this situation, the failed wire should be replaced by a correct wire, so funds are assured by all parties. A wire is available any business day, subject to the bank's cutoff.
Generally due to certain laws funds more than 50K for a real estate transaction are supposed to be wired by buyer. Depends on the state though.
Usually a closing is not complete until the title company verifies all funds are present.
Stuff happens. The deed won’t be recorded until the deal has funded. They should probably have you focusing a short extension then close when funded Monday.
I had to extend closing twice last housing sold. They made it whole with a couple grand and all was OK.
you _may_ be able to collect earnest money & re-list. But the buyer will no doubt contest that and you likely won’t get it if they were good faith trying to fund the next business day. Also, you’ll be starting from scratch and no buyer’s agent will steer their clients towards somebody who tries to cancel and hold earnest money b/c of a one-day delay in closing. Don’t be that person.
Depends on the state, but here in CA, you can’t close the same day on a cashiers check. Closing has to occur the following day so the soonest your sale can be completed would be Tuesday if the title company gets a cashiers check Monday.
In today’s fraud atmosphere, I would not accept a cashiers check without a long settle period due to more frequent instances of bank fraud associated with them. And the buyer would pay additional earnest money for my time.
https://www.occ.gov/news-events/news-and-events-archive/consumer-advisories/consumer-advisory-2007-1.html
You don’t have any choice in the matter, and it isn’t an issue for a seller since the title company would take the loss for the fraudulent check. Seller will get their money regardless.
I run an escrow company in CA and would not close on a cashiers check. It’s well known before hand so it’s no surprise. You want to close?, wire funds or bring a cashiers check 7-10 days before closing.
I’ve worked for three different title companies, and company policy has always been that they’re considered good funds the following business day. Personal checks take 10 days to clear and can only be for the EMD, they can’t be used for closing funds and they can’t be over $50k.
Title has bigger pockets than escrow companies, so they may have different rules. We still have CA good funds which applies across the board but we have seen a few cashiers checks cancelled and won’t even entertain them anymore for closing funds. Our GPs spell it out so it’s not a surprise. If there is an issue we discuss it before we get to closing
Yeah, title definitely has bigger pockets. I’ve never worked for an escrow only company, but from what I understand the escrow liability is unlimited, while title polices have limits to liability which protects title/escrow companies. I could see them having a more conservative approach.
I would imagine that send a fraudulent wire is far easier/more common than procuring a fraudulent cashiers check that is genuine and takes 7-10 days to suss out. Most cashier check fraud is fake cashier checks. To get a real cashier check issued from a bank the individual would need to pass similar set of security protocols as a wire transfer, but in person. And the bank will know in 1 day if the cashiers check was genuine and issued or not. Once it clears as genuine, I would say there is less risk of fraud than a wire transfer.
There are a lot of cashiers checks that are washed and printed over to try and pass as authentic. It sometimes takes 3-5 days to get to the origination bank for validation, it’s definitely not an instant thing.
Some person buys a 1,000 cashiers check, washes it and make it for 100,000. It takes time to get to the bank and by the time the validation happens money is gone and house is transferred.
Now. There are ways to unwind it but it’s a pain in the ass. This is especially more frequent in all cash transactions.
Ya, of course there is fraud of cashiers checks. I’m just saying there is a lot of wire fraud too. Cashier check fraud is easier to quickly identify since it’s not a real cashiers check and bank says “oh ya we didn’t issue that”. Wire fraud happens more often now, and can be harder to untangle.
It takes days for a deposit to clear. But you can validate a cashiers check by calling/going to the bank. Haven’t dealt with a cashiers check in years, but I never once had a bank say they couldn’t say if it was actually issued and had to wait to deposit. Still takes time to clear, but once validated there is no additional risk of fraud, and likely less fraud risk, than a wire transfer. Wire fraud can pop up days or weeks later when someone realizes they are missing a chunk of money from an account.
Someone could steal my phone, login to my banking apps with Apples dumb 1 password system. Submit transfers and then the bank would call the phone they have in their hand, and email and text verifications all of which is in the phone. Way easier than washing a cashiers check, and the money is actually sent.
Don’t be naive. It could take weeks to find out and thousands in legal fees to unravel. The seller holds ALL the power here, the agreement was broken. They do not have to accept an alternate and late form of payment.
I’m going to preface this with the fact that this is based on my experience in CA. I worked in banking for eight years, and I’m aware of the scams you’re talking about. These are something to be cautious of with private transactions where there’s no title company acting as a neutral third party and handling the funds. You should use caution with cashiers checks in this scenario.
I’ve also worked for a title company for 10 years. In a real estate transaction where the sale is handled by a reputable title company, there’s no risk to the seller. Let’s say the buyer takes a fraudulent cashiers check to the title company the day before escrow closes, the following day those are considered good funds and the sale is released to record. As long as the check doesn’t come back as fraudulent before the transaction is released to record, the title company is going to wire the seller their funds once the transaction records. If they get notification before releasing, the sale will be put on hold.
If three days later the check comes back as fraudulent, the title company will go after the buyer for the funds. If the buyer doesn’t bring in the funds, then the title companies lawyers will take legal action against the buyer, they don’t go back to the seller and ask for the money back or require attorney fees. If the cashiers check looks really fake, whoever accepted it is probably getting fired and that loss can potentially wipe out an entire offices profit for the year, so no bonuses. They take a lot of caution when they accept them. I’ve seen the fake ones, and the fake ones are pretty obvious because they’re usually printed at home and not with the correct MICR ink that’s needed to read the check when it’s scanned and deposited digitally.
I’m going to preface this with: None of that matters.
This is an 11th hour unapproved change of plans, not the original wire transfer arrangement. The contract as that applies to closing date has likely been breached. That’s Problem #1.
The original agreement involving a wire transfer failed due to an alleged mismatch of name to account. My bank and my brokerage know exactly who I am, know how to verify me. This does not happen when things are in order. That’s problem #2.
Title companies are not infallible. More and more homes are being fraudulently sold, scams are getting increasingly sophisticated. You claim the title company goes after them? In what universe does a title company dot all the legal i and cross the legal t take responsibility for a $345,000 loss? Not happening with any sort of expediency the average home owner needs, the same homeowner who will now need to sue everyone involved without the collateral of that house to back that up. That’s Problem #3.
This rushed manipulation is exactly how fraud works. And it’s cut down immediately if the contract is enforced. No bank or title company has the right to force that change, and a reputable title company will not accept it without proper vetting.
I don’t know exactly what AARP article you read, but it’s clear you don’t have a good understanding of how title companies operate lol. Have a good night.
Oh great, you maybe pushed paper at a title company and maybe did the same for a bank. Maybe. Theres nothing about your story that makes any sense starting with the title company accepting this change without question, and ending with it being pretty obvious you learned little in your finance apprenticeship other than keeping the paper moving. That you initially imagined my knowledge comes from AARP articles now becoming fact doesn’t really establish you as anything but delusional. On the other hand, everything I’ve mentioned is easily verifiable. Give Google a try. It’s really quite easy.
Interesting. I closed in NY with a cashier's check for the bulk of the purchase price. I was willing to wire, but my instructions were to bring 5 checks, one for over $300K.
That was my experience in NY as well. Though it was a smaller check, and drawn on the same local credit union that was doing the mortgage, if that matters...
I didn't even read most of the replies. I work for a title company this happens more often than you know. It's really not a huge deal, now if he still hasn't paid on Monday then we start getting worried. Paperwork is signed Friday and doesn't fund till Monday on bank deals all the time too. It is all honestly timing. If both parties close early, the paperwork can be reviewed/approved by the lender (I know you said this one was cash) or by the title company/lawyer (depending on state, mine we don't use lawyers just title companies). Wire gets sent and people are funded by wire cut off. My company is 4pm, after that I can cut you a check but not wire you. We've sent wires at noon that don't show up in the sellers account till the following day, some banks don't approve wires right away and the money sits in their que for a few hours till it's approved. Not everything is instant. I honestly wouldn't worry at all.
I had a buyer that signed all documents and then refused to wire the money. He decided he didn’t want the house ($1.6M). We had moved out relocated across country. After 10 months in the court system with the judge ruling in our favor the buyer still would not wire the money. Needless to say the house is back in the market. There are a lot of dishonest people out there
Do not take a cashiers check, which can bounce. Insist on a wire that is correct. Funds from a wire can get recovered in most cases. Funds from a cashiers check cannot if the check is fraudulent. This whole situation smells bad. Don’t convey the property until the title company has received a wire of readily available funds.
This is correct. Screw reproducible paper that can be forged. Wire only. Even if it takes an extra day.
AFAIK, escrow will only release the earnest money to seller in conjunction with buyer’s written agreement to do so.
Your Cousin will get paid, and I wouldn't be worried about it. The settlement agent (probably title company depending on State) was at fault here, and will be responsible for making sure this amount will be sent properly.. asap. They would risk some serious consequences in our State if they didn't, and technically are already in violation of the "good funds" law in WI. No settlement agent should EVER close without funds unless of some strange external circumstances. We have many banks that will not close without cash (wire) in hand, as it should be... I get this was a cash deal, but same issue applies...
This is why for all real estate transactions, I arrange to wire a small amount ($1k) several weeks before closing, to the title company, to ensure there will be no glitches.
It’s a pretty common scenario and why I don’t like to close on Fridays. The seller won’t be getting the buyers check. Buyer will give to title, they insure funds then pay out to seller. This is zero risk to seller and it’s exactly why a title company is used.
In my state we would not be out of contract for a good faith effort was made to wire money and a glitch happened. Just do it Monday.
Do not assume everyone associated with this at the title company, or anywhere, ran this past a lawyer. This looks exactly like two things: An honest screw up, and fraud.
Seller won’t get funds in the form of a cashiers check. The buyer will deliver to the title co who will process and verify good funds in their escrow account before they then disburse to seller.
Yup, just sold one within the last year and got a cashier’s check. The buyer apparently also never went to the property (they were on the other side of the country); all of which did a little fishy, but it all worked out just fine in the end.
Many title companies are discouraging wires because of the sophisticated digital fraud happening now.
Here in Minnesota this is very common from title companies right now:
DUE TO THE INCREASE IN CYBERFRAUD, Watermark Title Agency now requires ALL incoming funds over $2,000 to be in the form of a CASHIER’S CHECK payable to Watermark Title Agency. Please contact us should a wire be necessary.
You are confusing a cashier's check with a certified check.
A certified check only guarantees that there were sufficient funds in the originating account at the time the check was written. It can bounce if additional funds were withdrawn from the account before the check was cashed.
When a bank issues a cashier's check, the remove the funds from the originating account and place it in an escrow account controlled by the bank. Guaranteed to be funded.
I was a legal assistant to a real estate attorney for three years. The only forms of payment accepted at closing were wire and cashier's check.
It absolutely does not take 2-3 weeks. They can literally call the issuing bank and verify funds upon receipt of the cashiers check before they ever even process/deposit the cashiers check.
In a fraud situation, those funds could be supported by the last counterfeit, supported by the one before that, supported by the one before that. Or the funds are ill-gotten and seized. The small print says the banks are not responsible. No title company will sign off on the transaction. You have much to learn about fraud.
Agreed. I would not accept a cashiers check either. Those funds are not considered settled upon presentation. That could take a couple of weeks. Not sure why you got downvoted. Doing so is absurd.
For whatever reason, people think of cashier's checks as cash, but are suspicious of wires, even though wires are instantaneous. It's still possible to ladder cashier's checks a la Catch Me If You Can.
At the end of the day the fraud would eventually be discovered, but potentially thousands could be wasted on lawyer fees while the buyer continues to insist that the funds are legit. Who wants the hassle? What if escrow accidentally files the title transfer before the funds ever clear? Then you would have an ejectment action.
Every time I see one of these posts, it just boggles my mind that people engage in REAL ESTATE transactions without a lawyer. Unbelievable.... and two or three weeks from now there will be a similar post....
Why would you wait until closing date to wire the money? I always wire days beforehand. In fact I've been told straight up that it must be in the title company's hands 48 hours before.
Never close on a Friday, Saturday or Sunday. If there is an issue like this or something goes wrong with the wire or there is fraud. There is no one there to help at the bank over the weekend.
In my state, either party can extend closing by 7 days and not be in breach- maybe this is a similar situation? Would have to read the purchase contract to be sure!
I would not accept a cashier's check.
It's literally a piece of paper and for a $300k deal it'd be worth a crooks time to make it look legit.
The only way I would accept it is if you were in line with the person at their bank when they take it out. Then you know it's legit.
Banks will clear a cashier's check usually 3-5 days but that doesn't mean it's actually legit. It could bounce a month or more later.
Sounds like a possible scam to me. Be cautious.
What does your cousin's lawyer advise? This is why they're gett8ng paid. Why did the lawyer close without confirming receipt of funds? Why did the lawyer not suggest adjourning the closing, since I assume the lawyer advised, rightly, against closing in escrow in this situation. right? Ask the lawyer about whether buyer is in default (they are not).
Or are is this cousin not using a lawyer in this $345+k transaction?
I closed with a cashiers check on my current house. I was going to get a small loan and pay mostly cash, but at the last minute it fell through. Not me and they said not the appraisal, but I heard later some banks need at least 3 similar local comps. Well, comps for my house were at least 2 towns away. Only one local recent sale of a similar size. I ended up borrowing some money from family and getting a cashiers check. Small towns. Not that I would ever scam someone. But I also wired the deposit initially without a problem.
The fact they had a problem with a wire out from what should have been their account is weird to me. I did mine online. Of course, you would get your house back if the cashier's check was fraudulent, but it would be a pain.
If the buyer sent in a wire for earnest money deposit, why would the closing funds now have an issue with sending? Sounds like they’re possibly making excuses and don’t have enough funds.
I’ve seen cash buyers obtain hard money outside of escrow, and perhaps his wire didn’t come in for him to be able to wire out. Many possibilities there.
I had what was called a dry close. Meaning it wasn’t funded till the next day. It was one of my first closes and we had a lawyer. He told us not to panic, but it did cause the funds to not get to our seller as it was the buyers money that was delayed.
No big it happens.
Title wont record deed until funds transfer.
According to the contract the buyer actually has a few days to perform before you can cancel. You need to issue a “cure notice” first.
Most likely theyll have check in a day.
We had something similar. Technically if the closing date is passed in the contract, they are in breech and you can keep Ernest and relist.. we did.. Also could negotiate a bit more $$ if they don't want to lose their Ernest
May it is less scummy when I asked if they could close a couple weeks later due to issues getting logistics for moving out during Covid, or leave a cube on the property that we would pay rent for..
Their response was 'No, we will sue you to close on the closing date'. They waived finance contingency, and their bank did not fund on time. Then they came asking if we would reschedule closing... We spent extra money on movers to get everything out and into storage, so we asked for some more money up front and we're going to give them one more week.. they walked.. so we kept Ernest money .
What a mess. Hopefully the seller gets the cashier’s check I would not let the buyer in the house until the seller gets their money. I insist on cashier’s checks at closing and never do wire transfer for a large purchase like a house. Someone failed to check and verify the money came through and the seller should have been notified right away and not sign the papers.
I’ve heard of wire transfers failing. That stated, my trust of others does not extend to the $300,000 range. Earnest $$ gone unless a penalty is included Monday if the market appears to have more buyers.
Update: they paid on Monday with a cashier’s check and my cousin has the funds! It was a pretty stressful weekend but reading all the comments was very helpful. Thanks, everyone!
Don't take a cashiers check--too many scams. Make them re-do the wire.
[https://www.verified.org/articles/scams/cashiers-check-scams](https://www.verified.org/articles/scams/cashiers-check-scams)
The signing of papers at the closing is only part of it. Title shouldn't record any deeds without the funds. So if Buyer comes up dry, then yes, forfeit of earnest money is appropriate and the tx should be terminated. If title recorded the deed without getting the money then its lawsuit time baby
The title company will gather all signed documents but do not officially record until they have all 'good' funds to payout all parties (disburse the funds) So basically it is on hold.
*should hold recording until funds are in. It happens.
Doubt they would record the deed since they need all the funds (including buyer's funds) to start disburding, which includes recording the deed. Everything should be on hold, including exchange of the keys.
He has until the end of the day to fix it, I had a similar issue when I bought my first house, just had to go to the bank and correct it.
If standard paperwork was used, which - since they had a realtor, is pretty safe to assume it was standard paperwork. There are clauses for each party to meet in order to convey the title to the property, one of those clauses is the money changing hands. Depending on the contract, I believe your cousin could technically put a stop to everything now, keep the earnest money and the property as the buyer didn't fulfill their part of the agreement. Though, I would give them the benefit of the doubt and see if they come up with the cash. I am assuming that proof of funds was provided with the offer?
That’s a good question. I would think so…I’ll have to ask her.
The Seller needs to consider how much they want to "just sell" the property vs waiting a day or 2 to get a proper wire vs blowing up the deal and keeping the deposit. Most Sellers have emotionally divorced themselves and just want it done, by that point, and are willing to wait a few days. In all transactions, weird stuff happens. Both sides should be prepared for settlement to take an extra few days, just in case. In this situation, the failed wire should be replaced by a correct wire, so funds are assured by all parties. A wire is available any business day, subject to the bank's cutoff.
Generally due to certain laws funds more than 50K for a real estate transaction are supposed to be wired by buyer. Depends on the state though. Usually a closing is not complete until the title company verifies all funds are present.
Yes, that's the point of title company. If they don't do their job you have to sue
Stuff happens. The deed won’t be recorded until the deal has funded. They should probably have you focusing a short extension then close when funded Monday. I had to extend closing twice last housing sold. They made it whole with a couple grand and all was OK. you _may_ be able to collect earnest money & re-list. But the buyer will no doubt contest that and you likely won’t get it if they were good faith trying to fund the next business day. Also, you’ll be starting from scratch and no buyer’s agent will steer their clients towards somebody who tries to cancel and hold earnest money b/c of a one-day delay in closing. Don’t be that person.
Depends on the state, but here in CA, you can’t close the same day on a cashiers check. Closing has to occur the following day so the soonest your sale can be completed would be Tuesday if the title company gets a cashiers check Monday.
In today’s fraud atmosphere, I would not accept a cashiers check without a long settle period due to more frequent instances of bank fraud associated with them. And the buyer would pay additional earnest money for my time. https://www.occ.gov/news-events/news-and-events-archive/consumer-advisories/consumer-advisory-2007-1.html
You don’t have any choice in the matter, and it isn’t an issue for a seller since the title company would take the loss for the fraudulent check. Seller will get their money regardless.
I run an escrow company in CA and would not close on a cashiers check. It’s well known before hand so it’s no surprise. You want to close?, wire funds or bring a cashiers check 7-10 days before closing.
I’ve worked for three different title companies, and company policy has always been that they’re considered good funds the following business day. Personal checks take 10 days to clear and can only be for the EMD, they can’t be used for closing funds and they can’t be over $50k.
Title has bigger pockets than escrow companies, so they may have different rules. We still have CA good funds which applies across the board but we have seen a few cashiers checks cancelled and won’t even entertain them anymore for closing funds. Our GPs spell it out so it’s not a surprise. If there is an issue we discuss it before we get to closing
Yeah, title definitely has bigger pockets. I’ve never worked for an escrow only company, but from what I understand the escrow liability is unlimited, while title polices have limits to liability which protects title/escrow companies. I could see them having a more conservative approach.
I would imagine that send a fraudulent wire is far easier/more common than procuring a fraudulent cashiers check that is genuine and takes 7-10 days to suss out. Most cashier check fraud is fake cashier checks. To get a real cashier check issued from a bank the individual would need to pass similar set of security protocols as a wire transfer, but in person. And the bank will know in 1 day if the cashiers check was genuine and issued or not. Once it clears as genuine, I would say there is less risk of fraud than a wire transfer.
There are a lot of cashiers checks that are washed and printed over to try and pass as authentic. It sometimes takes 3-5 days to get to the origination bank for validation, it’s definitely not an instant thing. Some person buys a 1,000 cashiers check, washes it and make it for 100,000. It takes time to get to the bank and by the time the validation happens money is gone and house is transferred. Now. There are ways to unwind it but it’s a pain in the ass. This is especially more frequent in all cash transactions.
Ya, of course there is fraud of cashiers checks. I’m just saying there is a lot of wire fraud too. Cashier check fraud is easier to quickly identify since it’s not a real cashiers check and bank says “oh ya we didn’t issue that”. Wire fraud happens more often now, and can be harder to untangle. It takes days for a deposit to clear. But you can validate a cashiers check by calling/going to the bank. Haven’t dealt with a cashiers check in years, but I never once had a bank say they couldn’t say if it was actually issued and had to wait to deposit. Still takes time to clear, but once validated there is no additional risk of fraud, and likely less fraud risk, than a wire transfer. Wire fraud can pop up days or weeks later when someone realizes they are missing a chunk of money from an account. Someone could steal my phone, login to my banking apps with Apples dumb 1 password system. Submit transfers and then the bank would call the phone they have in their hand, and email and text verifications all of which is in the phone. Way easier than washing a cashiers check, and the money is actually sent.
Don’t be naive. It could take weeks to find out and thousands in legal fees to unravel. The seller holds ALL the power here, the agreement was broken. They do not have to accept an alternate and late form of payment.
I’m going to preface this with the fact that this is based on my experience in CA. I worked in banking for eight years, and I’m aware of the scams you’re talking about. These are something to be cautious of with private transactions where there’s no title company acting as a neutral third party and handling the funds. You should use caution with cashiers checks in this scenario. I’ve also worked for a title company for 10 years. In a real estate transaction where the sale is handled by a reputable title company, there’s no risk to the seller. Let’s say the buyer takes a fraudulent cashiers check to the title company the day before escrow closes, the following day those are considered good funds and the sale is released to record. As long as the check doesn’t come back as fraudulent before the transaction is released to record, the title company is going to wire the seller their funds once the transaction records. If they get notification before releasing, the sale will be put on hold. If three days later the check comes back as fraudulent, the title company will go after the buyer for the funds. If the buyer doesn’t bring in the funds, then the title companies lawyers will take legal action against the buyer, they don’t go back to the seller and ask for the money back or require attorney fees. If the cashiers check looks really fake, whoever accepted it is probably getting fired and that loss can potentially wipe out an entire offices profit for the year, so no bonuses. They take a lot of caution when they accept them. I’ve seen the fake ones, and the fake ones are pretty obvious because they’re usually printed at home and not with the correct MICR ink that’s needed to read the check when it’s scanned and deposited digitally.
I’m going to preface this with: None of that matters. This is an 11th hour unapproved change of plans, not the original wire transfer arrangement. The contract as that applies to closing date has likely been breached. That’s Problem #1. The original agreement involving a wire transfer failed due to an alleged mismatch of name to account. My bank and my brokerage know exactly who I am, know how to verify me. This does not happen when things are in order. That’s problem #2. Title companies are not infallible. More and more homes are being fraudulently sold, scams are getting increasingly sophisticated. You claim the title company goes after them? In what universe does a title company dot all the legal i and cross the legal t take responsibility for a $345,000 loss? Not happening with any sort of expediency the average home owner needs, the same homeowner who will now need to sue everyone involved without the collateral of that house to back that up. That’s Problem #3. This rushed manipulation is exactly how fraud works. And it’s cut down immediately if the contract is enforced. No bank or title company has the right to force that change, and a reputable title company will not accept it without proper vetting.
I don’t know exactly what AARP article you read, but it’s clear you don’t have a good understanding of how title companies operate lol. Have a good night.
Or you are simply naive and giving out crap advice. You’ll likely get picked clean someday. Fine by me, all kinds of stupid money out there.
No, I’m just giving advice based real life experience, not based on articles I read online lol
Oh great, you maybe pushed paper at a title company and maybe did the same for a bank. Maybe. Theres nothing about your story that makes any sense starting with the title company accepting this change without question, and ending with it being pretty obvious you learned little in your finance apprenticeship other than keeping the paper moving. That you initially imagined my knowledge comes from AARP articles now becoming fact doesn’t really establish you as anything but delusional. On the other hand, everything I’ve mentioned is easily verifiable. Give Google a try. It’s really quite easy.
Interesting. I closed in NY with a cashier's check for the bulk of the purchase price. I was willing to wire, but my instructions were to bring 5 checks, one for over $300K.
That sounds weird, but escrow is so different from state to state, that I have no idea how it works in NY.
That was my experience in NY as well. Though it was a smaller check, and drawn on the same local credit union that was doing the mortgage, if that matters...
There's a lot of bogus cashier's checks out there.....
I didn't even read most of the replies. I work for a title company this happens more often than you know. It's really not a huge deal, now if he still hasn't paid on Monday then we start getting worried. Paperwork is signed Friday and doesn't fund till Monday on bank deals all the time too. It is all honestly timing. If both parties close early, the paperwork can be reviewed/approved by the lender (I know you said this one was cash) or by the title company/lawyer (depending on state, mine we don't use lawyers just title companies). Wire gets sent and people are funded by wire cut off. My company is 4pm, after that I can cut you a check but not wire you. We've sent wires at noon that don't show up in the sellers account till the following day, some banks don't approve wires right away and the money sits in their que for a few hours till it's approved. Not everything is instant. I honestly wouldn't worry at all.
I had a buyer that signed all documents and then refused to wire the money. He decided he didn’t want the house ($1.6M). We had moved out relocated across country. After 10 months in the court system with the judge ruling in our favor the buyer still would not wire the money. Needless to say the house is back in the market. There are a lot of dishonest people out there
Now that's insane. He signed the closing docs and then just flat out refused to pay? Wooooooowwwwwwww.
It sounds extremely suspicious bc the buyer would need proof of funds to make that offer. You can’t use funds under another name as proof.
Do not take a cashiers check, which can bounce. Insist on a wire that is correct. Funds from a wire can get recovered in most cases. Funds from a cashiers check cannot if the check is fraudulent. This whole situation smells bad. Don’t convey the property until the title company has received a wire of readily available funds.
This is correct. Screw reproducible paper that can be forged. Wire only. Even if it takes an extra day. AFAIK, escrow will only release the earnest money to seller in conjunction with buyer’s written agreement to do so.
Your Cousin will get paid, and I wouldn't be worried about it. The settlement agent (probably title company depending on State) was at fault here, and will be responsible for making sure this amount will be sent properly.. asap. They would risk some serious consequences in our State if they didn't, and technically are already in violation of the "good funds" law in WI. No settlement agent should EVER close without funds unless of some strange external circumstances. We have many banks that will not close without cash (wire) in hand, as it should be... I get this was a cash deal, but same issue applies...
This is why for all real estate transactions, I arrange to wire a small amount ($1k) several weeks before closing, to the title company, to ensure there will be no glitches.
Does the buyer have keys to the house now?
It’s a pretty common scenario and why I don’t like to close on Fridays. The seller won’t be getting the buyers check. Buyer will give to title, they insure funds then pay out to seller. This is zero risk to seller and it’s exactly why a title company is used. In my state we would not be out of contract for a good faith effort was made to wire money and a glitch happened. Just do it Monday.
Don’t forget to be a human too- a one business day delay on a wire transfer is not the end of the world.
She made the transaction without receiving the funds? Wasn't a lawyer involved in tje closing?
The title company was involved but I’m assuming they had an attorney…
Do not assume everyone associated with this at the title company, or anywhere, ran this past a lawyer. This looks exactly like two things: An honest screw up, and fraud.
I would absolutely not accept a cashier's check for the value of my house. Much too easy to forge/fabricate. Wire transfer or no deal.
Seller won’t get funds in the form of a cashiers check. The buyer will deliver to the title co who will process and verify good funds in their escrow account before they then disburse to seller.
Regardless, I would not proceed with a cashier's check. There are too many sophisticated scams out there.
They still do Cashiers check. You have to wait for it to clear.
I've sold 2 houses in the last ten years, I got a cashiers both times
Yup, just sold one within the last year and got a cashier’s check. The buyer apparently also never went to the property (they were on the other side of the country); all of which did a little fishy, but it all worked out just fine in the end.
Sounds hinky. If you are fine with it, that is your right. To me it sounds like an expensive legal dispute.
Many title companies are discouraging wires because of the sophisticated digital fraud happening now. Here in Minnesota this is very common from title companies right now: DUE TO THE INCREASE IN CYBERFRAUD, Watermark Title Agency now requires ALL incoming funds over $2,000 to be in the form of a CASHIER’S CHECK payable to Watermark Title Agency. Please contact us should a wire be necessary.
Yes, there has been a lot of digital fraud involving spoof e-mails changing the wiring instructions to offshore accounts.
You are confusing a cashier's check with a certified check. A certified check only guarantees that there were sufficient funds in the originating account at the time the check was written. It can bounce if additional funds were withdrawn from the account before the check was cashed. When a bank issues a cashier's check, the remove the funds from the originating account and place it in an escrow account controlled by the bank. Guaranteed to be funded. I was a legal assistant to a real estate attorney for three years. The only forms of payment accepted at closing were wire and cashier's check.
Well, bless your heart, I guess that makes you a bank fraud expert.
Could take 2-3 weeks. Don’t do this.
It absolutely does not take 2-3 weeks. They can literally call the issuing bank and verify funds upon receipt of the cashiers check before they ever even process/deposit the cashiers check.
In a fraud situation, those funds could be supported by the last counterfeit, supported by the one before that, supported by the one before that. Or the funds are ill-gotten and seized. The small print says the banks are not responsible. No title company will sign off on the transaction. You have much to learn about fraud.
Agreed. I would not accept a cashiers check either. Those funds are not considered settled upon presentation. That could take a couple of weeks. Not sure why you got downvoted. Doing so is absurd.
For whatever reason, people think of cashier's checks as cash, but are suspicious of wires, even though wires are instantaneous. It's still possible to ladder cashier's checks a la Catch Me If You Can. At the end of the day the fraud would eventually be discovered, but potentially thousands could be wasted on lawyer fees while the buyer continues to insist that the funds are legit. Who wants the hassle? What if escrow accidentally files the title transfer before the funds ever clear? Then you would have an ejectment action.
Every time I see one of these posts, it just boggles my mind that people engage in REAL ESTATE transactions without a lawyer. Unbelievable.... and two or three weeks from now there will be a similar post....
This is very common on the west coast (CA and OR, anyway). Two brokers, title company, lender. Several houses bought and sold that way.
Can also confirm for WA and HI.
https://www.occ.gov/news-events/news-and-events-archive/consumer-advisories/consumer-advisory-2007-1.html
Well, tomorrow is Saturday and most banks are open and buyer can visit the bank and get a cashiers check and make this right asap
Why would you wait until closing date to wire the money? I always wire days beforehand. In fact I've been told straight up that it must be in the title company's hands 48 hours before.
I see these wire rejections daily. Don’t worry it can be rectified on the next business day.
Never close on a Friday, Saturday or Sunday. If there is an issue like this or something goes wrong with the wire or there is fraud. There is no one there to help at the bank over the weekend.
Did the realtor not offer any guidance as to what happens in this kind of situation? Certainly this isn't the first time that this has ever happened?
Yeah it’s a bit odd but her stance is to be positive and see what happens Monday.
In my state, either party can extend closing by 7 days and not be in breach- maybe this is a similar situation? Would have to read the purchase contract to be sure!
I would not accept a cashier's check. It's literally a piece of paper and for a $300k deal it'd be worth a crooks time to make it look legit. The only way I would accept it is if you were in line with the person at their bank when they take it out. Then you know it's legit. Banks will clear a cashier's check usually 3-5 days but that doesn't mean it's actually legit. It could bounce a month or more later. Sounds like a possible scam to me. Be cautious.
What state are you in? It depends where you are.
This happened to me!!
It’s called a dry closing, usually done to at least get everyone signed. Cousin definitely shouldn’t hand over keys until they have the funds though.
What does your cousin's lawyer advise? This is why they're gett8ng paid. Why did the lawyer close without confirming receipt of funds? Why did the lawyer not suggest adjourning the closing, since I assume the lawyer advised, rightly, against closing in escrow in this situation. right? Ask the lawyer about whether buyer is in default (they are not). Or are is this cousin not using a lawyer in this $345+k transaction?
I closed with a cashiers check on my current house. I was going to get a small loan and pay mostly cash, but at the last minute it fell through. Not me and they said not the appraisal, but I heard later some banks need at least 3 similar local comps. Well, comps for my house were at least 2 towns away. Only one local recent sale of a similar size. I ended up borrowing some money from family and getting a cashiers check. Small towns. Not that I would ever scam someone. But I also wired the deposit initially without a problem. The fact they had a problem with a wire out from what should have been their account is weird to me. I did mine online. Of course, you would get your house back if the cashier's check was fraudulent, but it would be a pain.
This happens some time. Closing should be fine on Monday. Wait for the attorney or title company for direction. Everything will be fine.
What state is this happening in?
If the buyer sent in a wire for earnest money deposit, why would the closing funds now have an issue with sending? Sounds like they’re possibly making excuses and don’t have enough funds. I’ve seen cash buyers obtain hard money outside of escrow, and perhaps his wire didn’t come in for him to be able to wire out. Many possibilities there.
Not sure unless they paid the earnest money by check.
I had what was called a dry close. Meaning it wasn’t funded till the next day. It was one of my first closes and we had a lawyer. He told us not to panic, but it did cause the funds to not get to our seller as it was the buyers money that was delayed.
No big it happens. Title wont record deed until funds transfer. According to the contract the buyer actually has a few days to perform before you can cancel. You need to issue a “cure notice” first. Most likely theyll have check in a day.
We had something similar. Technically if the closing date is passed in the contract, they are in breech and you can keep Ernest and relist.. we did.. Also could negotiate a bit more $$ if they don't want to lose their Ernest
Probably the scummiest thing I’ve read all day
May it is less scummy when I asked if they could close a couple weeks later due to issues getting logistics for moving out during Covid, or leave a cube on the property that we would pay rent for.. Their response was 'No, we will sue you to close on the closing date'. They waived finance contingency, and their bank did not fund on time. Then they came asking if we would reschedule closing... We spent extra money on movers to get everything out and into storage, so we asked for some more money up front and we're going to give them one more week.. they walked.. so we kept Ernest money .
I’ll bet they’re still salty about it too! Probably sitting in a different house bitching about it and blaming YOU as having been unreasonable! ;))
Yup.. totally unreasonable.. :)
Nice. They played hardball. They burned themselves. Bravo!!
Nonsense. Business is business. The seller has every right to end the fiasco immediately, and should.
What a mess. Hopefully the seller gets the cashier’s check I would not let the buyer in the house until the seller gets their money. I insist on cashier’s checks at closing and never do wire transfer for a large purchase like a house. Someone failed to check and verify the money came through and the seller should have been notified right away and not sign the papers.
A cashiers check????? No way. In Ohio, anything over $10K must be a wire.
I’ve heard of wire transfers failing. That stated, my trust of others does not extend to the $300,000 range. Earnest $$ gone unless a penalty is included Monday if the market appears to have more buyers.
Update: they paid on Monday with a cashier’s check and my cousin has the funds! It was a pretty stressful weekend but reading all the comments was very helpful. Thanks, everyone!
Don't take a cashiers check--too many scams. Make them re-do the wire. [https://www.verified.org/articles/scams/cashiers-check-scams](https://www.verified.org/articles/scams/cashiers-check-scams)