Blog

Have Paper Checks for your Real Estate Transaction
By Michael
May 16, 2017

Today's banking convenience with electronic processing and debit cards is great but they can lead to one problem in your real estate transaction.    It's important to have a "Paper Trail" that shows everything that goes in and out of your accounts related to the transaction and the amounts have to be an EXACT match.  Here's some simple rules to follow that will make things go smoother as you work with the lender and title company to get things moved from offer to closing:

  1. Be sure you have PAPER CHECKS for your account so you can pay earnest money and option fees with them.  If you don't have paper checks for your account, your local branch MAY be able to help by printing some temporary checks, but most banks will let you order a small quantity on their website.  But it can take a couple  of weeks to process your order.  Plan ahead.
  2. For any funds you receive for the transaction like option fees, gifts to help with down payment or closing costs, be sure to deposit the ENTRE amount into your account.  Don't make a deposit that gives you cash back in the same transaction.  If you need cash out, deposit the entire check and then withdraw funds from your account on a separate transaction.
  3. Keep in mind that for large amount of cash or checks from other branches or banks, your bank may not make funds available immediately.  There may be a "hold period" to make sure it clears.   
  4. Take a picture of any check you receive before you deposit it.   That way, you have a backup image if something happens.

New laws like the Patriot Act, regulations designed to reduce mortgage fraud and conservative lender underwriting requirements may seem like they give you hoops to jump through, but keep in mind  tha you're asking the lender to trust you with a large amount.  They don't loan their own money, but the funds deposited by investors and have an obligation to make sure that investor has the best possible chance to get a return on their investment.  Help them help you by staying organized and doing things in a way that not only gets it done but show independent verification it was done right.  You'll save time and reduce stress for everyone!   

If you have a question about any aspect of the process, remember, your agent is there to help and answer questions.