Why is the attorney asking for a burdensome wire process to send in the purchase funds?
Updated: Aug 18, 2022
A wire transfer sometimes referred to as a bank transfer, credit transfer, or EFT, is an electronic transfer of money from one bank or credit union to another. It has become more common for law firms in North Carolina to require wire transfers in a real estate closing because check fraud is so prevalent. Personal checks are no longer considered to be “goods funds” in North Carolina because personal checks are not irrevocable. “Good funds” are “funds guaranteed to be available upon demand. They are an equivalent to cash.” (www.titleresources.com). North Carolina requires deposits to the trust or escrow account which have been irrevocably credited to the account. (N.C. Gen. Stat. § 45A-3(7)). Therefore, since personal checks are now not irrevocable, and are no longer considered “good funds,” a wire transfer is the preferred method in a real estate closing.
Additionally, nowadays, a buyer can cancel personal checks with your bank after they generate them. Further, it could take days before the receiving bank clears the personal check. Whereas wire transfers clear right away into the trust account, the same day as the buyer sends it. Furthermore, the wire transfers are irreversible as mentioned above, and therefore they are held safely in the trust account.
In closing, make sure you are comfortable with sending a wire transfer. If you are not comfortable with sending a wire transfer, make sure you discuss the closing process and protocols for transferring funds and sending personal information with your real estate or settlement agent before the process begins.
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