Q&A: How to make payments at closing -- no personal checks

If you're selling a home, you may need

If you're selling a home, you may need to go beyond curb appeal to get the property sold. (Credit: AP, 2010)

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Q: I am buying my first home and I’m wondering how I actually pay my down payment at the closing. The real estate agent asked me for a small check as a good faith deposit, but I can put down more – and want to.

Should I bring cash to the closing? If not, will the sellers take a personal check?

A: Personal checks are not accepted at the closing table for any amount over a few dollars. That’s because it is easy to pass a bad check and no way to truly verify that the funds are in your account at that moment.

Unfortunately, title companies and escrow companies don’t take cash. (Really, would you come to the table with $50,000 in cash?)

Instead, you’ll want to have a cashier’s check drawn at your bank. The bank will verify that the funds are in your account, and that should be good enough for the title company. These days more and more title companies and closing agents will require you to wire transfer the funds from your bank account to the title company’s or closing agent’s bank.

If the closing agent has the funds in its account, the closing agent has a greater comfort level to close the transaction.

Your closing officer at the escrow or title company (or real estate attorney, if you’re using one) should be able to provide you with a list of items needed for the big day. However, your lender, if you are using one, should have given you an estimate of most charges you might expect to see at the closing, along with an estimate of the amount of money you will have to bring to the closing.

Based on this estimated amount, less any amount you have given under your contract is what you will need to bring to the closing to buy your first home.

You might be happy to get your money delivered to the closing early, but you should actually time the delivery of your money to coincide with the closing date or be early by a day or two. You usually don’t want your escrow money or earnest money sitting around a closing agent, title company or settlement agent’s offices too long.

Also, while you might want an exact number for your closing or settlement weeks in advance of the closing, you might only get them the day before closing or settlement. If you are nervous about the amount you might need, you can have the funds ready to go for your closing or settlement and send them as soon as you get the bottom line. You might even be able to send the funds that you estimated and go a bit higher than that and send those funds to your closing or settlement.

If you send too much money to your closing or settlement, the closing or settlement agent will either wire the funds back to your bank or can cut you a check back for the difference right at the closing table.

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