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Cashiers Check/Certified Funds/Money Order

Licensed Real Estate Broker

Bourbonnais, IL

October 07, 2009

New one on me.....after 25 years of receiving Earnest Money by personal check/cashiers check/certified check/money order, just had "buyer"put stop payment on cashiers check (not local bank - national chain bank). Just when you thought it was safe to go back in the water...wham...my office has been in existence for over 40 years...office has never had this happened....what form of funds are "unstoppable"(?). I have call into local bank president for info...but has anyone had this happen to them? (just recently local title company received $30K money order for closing that was fraudulent - so money orders aren't necessarily fool proof either). Thoughts please....

Licensed Real Estate Broker

Pleasant Hill, CA

October 07, 2009

Certainly seems to me (not an attorney) that a buyer who did this would have big issues and possibly a lawsuit related to a breach of contract, bad faith, default, fraud? Or all of the above? Anyway, I suppose nothing is fool proof, maybe a direct wire from their account to the title company is more secure?

Licensed Real Estate Broker

Bourbonnais, IL

October 07, 2009

I wondered about non-performance too. But in Illinois the signature on the contract seals the deal...earnest money is the first contingency...local contracts now read EM to be presented w/i 24 hrs or contract is void. I will keep you updated on what I learn from my bank representative. And for the record, the buyer did not like bank's loan stipulations so asked to be released...seller said yes and signed release immediately...selling agent was notifed right away as well that EM would be returned as soon as check cleared bank....so there was never any issue that money would not be returned...but I (so is my broker)happy that we didn't just send back EM without waiting for check to clear(as we "assumed")cashiers check was good as cash....one more thing to worry about....

Licensed Real Estate Broker

Palm Coast, FL

October 08, 2009

Cashier's Check over the past few years have grown to be the best way to defraud people out of their valuables. Counterfeiters have gotten so good that even banks cannot recognize the difference from a real cashier check and a fake one from their own bank. The most popular way that criminals use them is purchase your used car. The bank cashier accepts the cashier check and you sign over the car title. Two weeks later the cashier check comes back as a fake and you are out the car and the amount of the cashier check (the bank goes after you for their loss). I advise that you threat a cashier check just like a personal check if you are selling anything.

Licensed Real Estate Agent

Solana Beach, CA

October 08, 2009

A wire transfer straight into the escrow account is probably the most direct way to secure the funds.

Licensed Real Estate Broker

Bourbonnais, IL

October 08, 2009

After checking with local bank, appears any bank draft can be stopped...but most of them take from 30 to 90 days...hence I am puzzeled how this happened in under 5 days...something is not sitting right here..but I have heard twice now about cashiers check being conterfeit (car and motor cycle were stolen). Bank agrees with you...best way is to wire funds...but asking a buyer to wire funds for EM sounds like overkill and insulting....I guess you just take your chances...but thanks to all for the comments...vy/lmk

Licensed Real Estate Agent

Ocoee, FL

October 08, 2009

Wow, you learn something new everyday here! I have never had this happen to me, but typically do most of my transactions (short sales and REO's with sellers who live in other states) by mailaway and wire transfer.

Title companies like this as well because it is so easy for them to do, the buyers lender loves it because the money is as good as cash and the entire deal gets funded immediately. I guess it's just a matter of educating our clients as to how the best way to proceed in our strange market today with people stealing identities, etc. that this is now how it is done.

I don't have an issue with asking for wire transfer, if the buyer is serious about buying, the seller is serious about selling, one way or another no matter how they pay, they pay.

I would definitely check into the bank policy though as to the amount of time it takes to cancel a cashier's check in the future and would not make the deal 'agreed or ratified' until funds cleared - hence another good idea for doing wire transfer as it is like putting cash from one hand to another.

Too bad after all of the hard work we do to make a transaction work that we have to deal with yet another wierd issue like this, but I felt it important to mention about the wire transfer issue. It will not be insulting to the buyer if it is explained why it is necessary in order to not hold up closing, however like I said, it's the norm for me because I hardly ever deal with a local seller or buyer, but when it's my listing, the first thing I explain to the other agent is 'this is how a short sale works' because I hardly ever deal with an agent who knows, and communication and cooperation are important and they appreciate the help.

There is the mailaway to the seller, then the short sale 3rd party lender, then off to the title company, who then forwards to buyers lender for their approval, at which point the buyer is ready (if local and not a mailaway) to sign their docs and produce liquid funds, so if you want to close in this millinium, you need to do wire transfer and that includes wire transfer of the deposit so a HUD can be generated (which the short sale lender requires prior to their approval).

If a buyer has an issue with this, they are usually not serious and I'd rather find out sooner than later and save everyone grief. If they are serious and they HAVE the money, what difference should it make? Either way, they are purchasing a house. Try going to any store and buying something with a personal check, they want your drivers license, 3 phone numbers, your next door neighbors number, your blood type and a fingerprint, sheesh! If you want to avoid all that aggravation you have to use a debit or credit card, and I don't know about all banks, but once I pay, I have to prove a dispute if I don't agree that I actually purchased the items. That alone is a 3 month ordeal.

Guess it is a perception on everyones part not to 'insult' anyone, but with all the evil things going on with fraud nowadays, it's a great way to weed out the frauds and non serious people, so I have no problem in saying it has to be by wire transfer because I want to know they have the money and that it is going to close.

Just my .02

Licensed Real Estate Broker

North Myrtle Beach, SC

October 09, 2009

This is all very true. I had this happen to me with a purchase through a Craig's List posting I had. I caught the problem in time because I would not release the goods until the check cleared; however, the check was a fraud. I asked the bank to go after the people that issued the check and they acted as if they were not interested. I contacted the police and they had the same amount of disinterest.

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