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.

For more information on moving, check out my Roadmap for a Successful Relocation.