How does seller get payment (certified cheque?)

ottawavalleygardenerAugust 8, 2012

Long-time lurker here :) ...How are sellers supposed to get payment from the lawyer when the sale of a property has gone through? Certified cheque, bank draft, or regular cheque? What is common?

We just sold a 9 acre lot that we severed off a larger acreage, and our lawyer gave us the payment with a regular cheque from the legal firm's account. My bank is holding the funds for 4 (=7) days, and I'm out $100 in interest because that delays a payment we are making to reduce our house mortgage. I'm not worried about the cheque bouncing or anything like that, I'm just a bit confused about process.

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redcurls

Ours was wired to our bank within about 3 days. I think there was a $15 fee.

    Bookmark   August 8, 2012 at 9:17PM
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redcurls

Ours was wired to our credit union in about 3 days.

    Bookmark   August 8, 2012 at 9:18PM
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lazy_gardens

What was specified in the sales contract?

    Bookmark   August 8, 2012 at 9:27PM
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barbcollins

We have gotten them both ways.

One of the main reasons we left BoA. They were constantly putting holds on our deposits.

Most settlement companies will wire the funds if you request it (ahead of time). There usually is a fee.

I would not be happy if I requested a wire and they charged me a wire fee, and then held the funds for 3 or 4 days though.
For our last home sale, settlement occurred at 10:00am (we weren't there, it was in another state), and the wire posted to our account before lunch (I bought lunch for everybody at work that day to celebrate).

    Bookmark   August 8, 2012 at 10:05PM
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marie_ndcal

You should not be out any interest. The money is in the account, but just not able to be spent like you wish. But still must collect interest. If not, talk to the branch manager or the main office.

    Bookmark   August 8, 2012 at 10:30PM
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maremma

Seems to be common practice these days for banks to hold deposited funds for extended periods of time before permitting withdrawals. Even certified checks and bank drafts, the equivalent of cash, are held. Not sure about how wired-in money is treated.

But here's the clincher in many banks: even CASH deposits cannot be drawn upon for several days. Since 9/11, heightened security has reached the point of absurdity.

Couple these rules with exorbitant fees and zero interest, and you get one helluva banking system.

    Bookmark   August 9, 2012 at 12:16AM
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ottawavalleygardener

Thanks for the responses. We had a Realtor, and used a local, small-town lawyer to do the final paperwork for the severance and sale. They said they weren't set up to direct deposit electronically, and there was nothing about it in the Realtor's listing agreement.

It seems crazily inefficient... I deposited the funds last Friday before a long weekend (Monday was a holiday here) and so the 4-day hold didn't even start till Tuesday. My bank said my only option was to go back to the lawyer to get it certified, or go to the actual branch of his bank to do so (two hours round trip) My mortgage is held in yet another bank, further complicating things. Oh well, at least it was a fairly quick, straightforward sale, which I'm grateful for!

    Bookmark   August 9, 2012 at 6:37AM
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barbcollins

"You should not be out any interest. The money is in the account, but just not able to be spent like you wish. But still must collect interest. If not, talk to the branch manager or the main office."

She is saying she is out interest because she can't make the payment on the mortgage due to the hold.

    Bookmark   August 9, 2012 at 7:18AM
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weedyacres

I can guarantee the interest the bank will pay for her deposited funds is less than the mortgage interest rate.

See if your bank will call the branch where the check was issued and verify that the funds are there. I'd put up a stink about it...sometimes when I do that my bank relents and removes the irritating and arbitrary hold.

Since your mortgage is at another bank, if you mail them the check it will take a couple days to clear back to your account, so you could shave a little bit off the time there.

    Bookmark   August 9, 2012 at 8:50AM
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ottawavalleygardener

weedyacres, I did make a fuss, but my bank refused to call the other bank to verify that the funds were there. I spoke to the branch manager and explained that I was a 3-decade customer. Nope, Rules Are Rules. They incorrectly advised me that I could take the cheque to any Scotiabank to get it certified, but that's not true. I went to another branch of my bank to see if I got another answer. Nope.

The penalties for NSF are too great for me to risk anything but delaying the mortgage downpayment. (And that financial institution is charging me $600 to make a prepayment since I've already maxed out my current-year extra payment) >:(

I'd like to switch banks, but don't know if any are better than the other (we only have about 5 banks here in Canada).

    Bookmark   August 9, 2012 at 9:27AM
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azzalea

This is exactly why I deal with a small savings bank (only 2 branches) where they know me, know I've been a good customer for the past 40+ years.

We got a 'regular' check when we sold our'old' house in May. Took it to my bank the next day, to pay off my mortgage on my 'new' house, and they took it with no problem at all--paying off the mortgage with a portion, and then putting the rest into one of my accounts there.

At the new location, I specifically looked for a small savings bank--and found one that's just as easy to work with as that one. Not only do small savings banks offer much better customer service, they usually pay far better interest (one I deal with pays 10 TIMES the amount of interest the commercial bank my aunt was using at her death was paying!!!) I just don't see the point of using a commercial bank at all--well, I guess for some, the hours may be an advantage, but not when you're losing that much money every month!

At this point, I don't see that there's anything you can do about the situation. No one did anything wrong, it was just inconvenient for you. But I'd highly recommend bank shopping for the future, and finding an institution that will better meet your needs.

    Bookmark   August 11, 2012 at 11:30AM
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