Help! Title company says 'Pay BEFORE Close'

JamieOctober 8, 2011

We are supposed to close on Friday Oct 14 on a house in Indiana. We currently reside in MI. We have not seen the house for a couple of months. A walkthrough is scheduled to take place just before the closing meeting.

The closing is conducted by Chicago Title Company. My realtor is telling me we must wire transfer the money (cash sale) the day before close. I think I'd have to be insane to do that. I have placed a call to the Title Company but probably won't hear back until Monday. In the meantime, what's your take? What should I prepare to do/say?

It would probably be cheaper for us to lose our earnest money than to start litigating. But I would really feel ripped off if that happened. We made the offer about 3 weeks ago so the house has only been off the market that long. It was on-market a long time and empty. I feel certain the seller would be willing for us to make payment at close; I'm under the impression that to do otherwise is unreasonable. I'm quite sure this early payment demand is for the convenience of the title company or the realtors.

Advice?

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mojomom

Not unusual at all. The title company holds the funds in escrow until the close. Wire transfers are fast, but not instantaneous. Many times I've seen closings delayed hours or even put off until the next day waiting for the funds to hit the bank -- title company will not close until they receive notification that the funds have been deposited into it's account. Wiring the day before assures no glitches/ delays. Back in the 80s with high interest rates banks were notorious for pushing the button just late enough in the dat that they git the overnight float. Most of these were commercial closings, but we've twice wired in advance on residential closings. You are noy "paying in advance". The seller doesn't get the funds until closing. The funds are escrowed until closing.

    Bookmark   October 8, 2011 at 4:21PM
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Jamie

Why can't I bring a cashier's check?

    Bookmark   October 8, 2011 at 4:36PM
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terriks

You would have to wait for the cashier's check to clear. There has been a lot of fraud lately with forged cashier's checks.

    Bookmark   October 8, 2011 at 4:43PM
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Jamie

Harumph!

Thanks for the info.

A friend once sold her New Hampshire cottage to a guy who came with a sackful of cash.

I guess I may have to comply, but I can't help but think Brickeye doesn't wire payment. He's my hero in these matters of personal commerce.

    Bookmark   October 8, 2011 at 5:02PM
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rafor

I have always just taken a certified check to closing. It has never been a problem. FYI: we asked jokingly once if the we could just bring cash. They said no. They had no way to handle it!

    Bookmark   October 8, 2011 at 5:47PM
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brickeyee

I have wired closing money.

The last time in the fall for a pair of REO closings about a year ago.

Virginia has wet closings, where collected funds must be used and disbursed.

The rampant fraud with cashiers checks has made them less valuable, and a certified check costs the federal reserve fee (the bank collects it but sends it on).

Local cashiers checks are still acceptable to the settlement agents I deal with, but they prefer wire since they know the finds are good.
The problem I had years ago was a bank (know merged) that wanted a ~$12 fee for a cashiers check.

I took cash once, and a free check a few other times after requesting cash.

    Bookmark   October 8, 2011 at 6:29PM
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ncrealestateguy

Fannie Mae required my last clients funds to be wired one day before close. They would not sign off on the Settlement Statement until the attorney verified the wire was completed.

    Bookmark   October 9, 2011 at 8:16AM
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booksandpages

We closed on a teardown in August and were told that title companies are requiring the wiring of funds ahead of time. Its a fraud prevention mechanism. Our bank charged us $20 for the wire fee, which annoyed me because in the past we've always got certified check free, but I was closing down the account anyway, so I didn't have any leverage.

    Bookmark   October 9, 2011 at 11:29AM
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brickeyee

"...I was closing down the account anyway, so I didn't have any leverage."

Demand cash.

it well cost them more than $20 to just count it out

    Bookmark   October 9, 2011 at 12:14PM
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Cindy1961

We bought our house on a Monday, cash sale. We had to wire the money on Friday, just to make sure it got there. The lawyers office sent me confirmation when they got it.

Yes, we could have bought a certified cashier's check, but we'd have to bring it in advance of the closing to make sure it cleared before closing. Since we are in RI and our house is in VA, it was easier to wire the money before we left.

    Bookmark   October 17, 2011 at 3:44PM
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brickeyee

"certified cashier's check"

Never had a bank certify their own check.

Cashiers checks are drawn 'on' the bank itself.

Certified checks are stamped by the bank after the funds are transferred to the local clearing house for checks run by the Federal reserve.
Certified checks ARE collected funds.
Cashiers checks are not.

A lost or destroyed certified check is a real disaster to recover the funds from.

The bank can stop payment or disown a cashiers check.

    Bookmark   October 17, 2011 at 7:36PM
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Cindy1961

I think actually, that my agent might have used that term and I was repeating her. I knew what she meant, my bank knew what she meant.

Sorry my improper phrasing put such a crimp in your day.

    Bookmark   October 17, 2011 at 10:07PM
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