Wire Transfers When Closing on a House
The past week has felt like a bit of a tightrope act... As I've noted previously, we closed on our current former house last Thursday, and are closing on our new house tomorrow. And while we could afford to carry both houses for awhile if necessary, our intention has been to take the money from our previous house and put it straight into the new one. The problem here is funds availability... Even if the first close went well (it did), we needed to get our hands on the money quickly. As it turns out, banks are now placing relatively lengthy holds on cashier's checks.
Gone are the days when a cashier's check was essentially treated like cash -- while they're still written against certified funds, there's been so much fraud in recent years that most banks subject cashier's checks to the same funds availability rules as plain old personal checks. What this means is that, if you need to turn the funds around in short order, you're out of luck.
Given that we had a grand total of six days between closings, with three of these being eaten up by the holiday weekend, we needed a different approach. One possibility would have been a second mortgage, or a bridge loan. In fact, we had already lined up a second mortgage to cover the shortfall if the sale of our house fell through. However, that second mortgage was going to cost us over $500 in closing costs (it's a long story, don't get me started). Thus, we wanted to avoid using it if at all possible.
Enter the wire transfer. Wire transfers are a great way to get money from point A to point B with minimal delays. When exectued properly, they're (nearly) instant and (relatively) inexpensive. A few weeks in advance of the close, we informed the closing attorney that we wanted to receive our funds via wire transfer. He asked us for written wire instructions, which basically consist of the bank name, account holder name(s), ABA wire number*, and account number, and the rest is history. The funds were sitting in our account (and available) within hours after we closed -- in fact, it would have been even quicker if the attorney didn't drag his feet getting to the bank.
Moral of the story: If you're selling and buying a house on a tight timeline, consider asking for the proceeds of the sale to be delivered to you via wire transfer.
*NOTE: The ABA wire number is generally not the same as the ABA check routing number. Be absolutely sure that you give them the right number or your money will end up in limbo.
--
Please CLICK HERE to read/leave comments on this entry
"Wire Transfers When Closing on a House
" was first published at fivecentnickel.com
While I'm confident that this won't be an issue for us, I just ran across an interesting article on the costs associated with a failed real estate deal. Depending on when the sale falls through, it can turn out to be quite costly for the ... Read
If you've ever bought a home, them you're most likely familiar with the term 'title insurance.' But do you know exactly what it is? Simply stated, title insurance protects against possible losses if someone else can claim ownership of your property after closing. Read
What do you mean the ABA Wire number is not the same as the ABA Routing Number.
I have had many wires into a checking account from many different accounts including domestic banks all over the country and foreign banks in Canada, Mexico, and the Caribbean.
I have never given anyone any number other than the standard ABA Routing Number and the Account Number.
I have never even heard of a different kind of ABA number for wires. What is this and where would you find details on such a thing? I have never seen a bank even promote or publish a number other than their ABA Routing Number????
Please advise.
Thanks.
