Jul 23, 2010

Tip 28-2010: Banks, Certified Checks & Wires

For many years, it has been our local practice to require cashiers checks for all closings. Recently, we have learned the Federal Reserve has been putting a random hold on certain cashiers checks, thus causing our local banks to sometimes not give immediate credit. This Federal Reserve policy is due to the recent increase in counterfeit cashiers checks. One way to avoid the difficulties these holds can cause is to require bank wires instead of cashiers checks.

For example, the Buyer will wire to his/her attorney the necessary funds for the purchase of the real estate. (Banks are already wiring the loan proceeds to the Buyer’s attorney.) Then the Buyer’s attorney will have immediate access to the closing funds in order to close with the Seller’s attorney without any delay or hold on the funds by the Federal Reserve. (Local practices may evolve to address this issue.)

For now, please advise your buyers that they should arrange with their banks to be able to wire to the settlement attorney the necessary funds to close. As long as the Buyers arrange for the wire ahead of time, this new practice may actually be easier for the Buyers, as they do not need to rush to their bank to get a cashiers check. Also, as the exact amount needed to close may not be available until just before closing, the final amount of the bank wire can be adjusted accordingly.

Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia

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