Certified Funds Requirements for Real Estate Closing or Escrow

A very important and misunderstood step in the home buying process is bringing funds to closing requirements.  Attorneys, settlement agents, and lenders require certified funds or a certified check.  We will explain what this means as well as things to avoid.  Funds to closing normally CANNOT be cash or personal check!

Unless you have special permission from the closing attorney or settlement company,  you cannot bring cash or a personal check.  These are only allowed if the amount to close is a negligible amount.

Certified Funds Requirements for Closing

certified funds requirements for real estate purchase
Do Not Bring Cash or Personal Check to Closing!
  • Wire funds from your bank account
  • Certified Funds check from your bank account
  • Ask your settlement agent / attorney for their requirements

Certified Funds for Out of Town Banks

If you have recently relocated or use an online bank, getting the certified funds could be challenging.  Out of state or online banks may require some of the following to obtain the funds.

  • Personal appearance to request wire
  • Personally appear for a certified funds check
  • Extra time to transfer funds to another local account (we will need proof of transfer)

There are several reasons many closing attorneys or settlement companies will not accept a cashiers check or money order.  But it all comes from fraud.  Financial crooks are good at duplicating cashiers checks or money orders.  The settlement agent is required to certify funds are good in their trust account so they must take extra steps in verification.  Although a wire is not fraud-free.  Additionally, fraudsters have ways of stealing wired funds as well!

The best practice is to call the attorney directly to verify the written wiring instructions are accurate!

Personal checks are not allowed because the check could be cancelled or the check could bounce.  This could happen after closing.  Since everyone is depending on the deed to be recorded and all funds to be good, borrowers must comply with the requirements mentioned in this article.

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Written By: Russell Smith