Proceeds from home sale: wire or cashier's check?

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tuningfork
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Proceeds from home sale: wire or cashier's check?

Post by tuningfork »

I will be selling my home soon and have been asked whether I want the proceeds by wire or cashier's check. The amount will be over $500,000 and some of the proceeds will be used a few weeks later toward purchasing a new home.

1. Wire or cashier's check: which do you prefer, and why?

2. Would you use a traditional bank or Fidelity? I have accounts at both, and both have local offices nearby.

3. Would you be concerned that the amount is over the FDIC insurance limit of $250K?
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8foot7
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Re: Proceeds from home sale: wire or cashier's check?

Post by 8foot7 »

1. It doesn't matter. I'd pick the one without a fee. If they are both free to you (to send AND receive), take the wire.
2. Wherever you want to funds to reside is where you should send them.
3. No.
jerkstore
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Re: Proceeds from home sale: wire or cashier's check?

Post by jerkstore »

tuningfork wrote: Thu Aug 11, 2022 3:54 pm I will be selling my home soon and have been asked whether I want the proceeds by wire or cashier's check. The amount will be over $500,000 and some of the proceeds will be used a few weeks later toward purchasing a new home.

1. Wire or cashier's check: which do you prefer, and why?

2. Would you use a traditional bank or Fidelity? I have accounts at both, and both have local offices nearby.

3. Would you be concerned that the amount is over the FDIC insurance limit of $250K?
1. Wire. More reliable and safer.
2. Whichever allows me to login or call to confirm there is a wire of funds.
3. Nope.
jebmke
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Re: Proceeds from home sale: wire or cashier's check?

Post by jebmke »

I've done both wire and check via bank with no concerns. The money can be moved out of the bank if you are concerned about FDIC.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Big Dog
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Re: Proceeds from home sale: wire or cashier's check?

Post by Big Dog »

wire, bcos its same day, and you could invest it immediately if that is your desire. It could take several days for them to print a bank check. The $30 wire fee is chump change in a home sale.

Sent money to Credit Union, and no, had zero concern that it was sitting there. I eventually moved it to Vanguard and invested it.
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Shackleton
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Re: Proceeds from home sale: wire or cashier's check?

Post by Shackleton »

Just did this… $1.5M wired to my Fidelity account. No problems, no concerns.
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lstone19
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Re: Proceeds from home sale: wire or cashier's check?

Post by lstone19 »

Closed on the sale of our home two weeks ago. Had funds wired to Fidelity - posted to Fidelity less than two hours after the closing. Had it been a check, it would have been mailed to us (we were not present at the closing having signed our stuff in advance). Although there was a wire fee, the interest earned on the funds for those few extra days more than paid for it.

Since it went to Fidelity, the FDIC insurance limit was never a consideration.
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Re: Proceeds from home sale: wire or cashier's check?

Post by 123 »

Wire is the quickest way to having "good funds". With a check, even a cashier's check, there is an issue of having to "present" it and potential delays involved. If you get a cashiers check, deposit it to your local bank account, and then intend to send it onward you are just building in further bottlenecks and delays. The escrow company will know where the funds go (wire) but I don't believe that is ever disclosed to the buyer. Even if you get a cashiers check the escrow company can know where the funds went due to the the banking system's check handling procedures.
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Hebell
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Re: Proceeds from home sale: wire or cashier's check?

Post by Hebell »

With a postal service the way it is, I cannot imagine doing anything other than a wire. In fact I have a closing next week and that's what I want!
safari
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Re: Proceeds from home sale: wire or cashier's check?

Post by safari »

Definitely a wire. The money is available for you to use on the same day. With a cashiers check, it takes a day to receive it via mail, then you have to go to the bank to deposit it, and the bank will most likely put a hold on the funds. I closed an account at Citi bank last year and they gave me a cashiers check, which I deposited to another bank, and was surprised to learn that it would be a week before I can use that money. I thought a cashiers check would not be subject to a hold because it's guaranteed by the bank, but that wasn't the case.
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Re: Proceeds from home sale: wire or cashier's check?

Post by AerialWombat »

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Last edited by AerialWombat on Thu Aug 25, 2022 5:10 pm, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
adestefan
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Re: Proceeds from home sale: wire or cashier's check?

Post by adestefan »

Hebell wrote: Thu Aug 11, 2022 5:06 pm With a postal service the way it is, I cannot imagine doing anything other than a wire. In fact I have a closing next week and that's what I want!
Most documents are sent FedEx Next Day. Which is distinct from every other FedEx service and is very reliable.

But yes. Wire it.
Last edited by adestefan on Thu Aug 11, 2022 5:39 pm, edited 2 times in total.
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Re: Proceeds from home sale: wire or cashier's check?

Post by anon_investor »

tuningfork wrote: Thu Aug 11, 2022 3:54 pm I will be selling my home soon and have been asked whether I want the proceeds by wire or cashier's check. The amount will be over $500,000 and some of the proceeds will be used a few weeks later toward purchasing a new home.

1. Wire or cashier's check: which do you prefer, and why?

2. Would you use a traditional bank or Fidelity? I have accounts at both, and both have local offices nearby.

3. Would you be concerned that the amount is over the FDIC insurance limit of $250K?
Wire to Fidelity. Done.
wingman4uz
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Re: Proceeds from home sale: wire or cashier's check?

Post by wingman4uz »

I’ve done this a couple of times and have used wires. I would happily do so again. Wire fraud is, however, a thing so I would ensure the escrow/closing firm have rock solid protocols to prevent that. I don’t think it matters where you wire the money to and the FDIC thing you just have to get over.
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celia
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Re: Proceeds from home sale: wire or cashier's check?

Post by celia »

I took the proceeds from a condo sale to BofA for a trust account. I waited probably 2 hours after I was waited on because they were apparently doing a “Know Your Customer” check, probably since I had never walked into the local branch before. Never again! Others were withdrawing cash (on a Friday pay pay) by just showing their ATM? card and walking out with cash. I, on the other hand, was trying to DEPOSIT a check.

I didn’t know about KYC regulations at that time, but if I had, I would have gladly paid the $30 wire fee. I guess, I was also looking out for the best interests of the soon-to-be heirs.

By the way, FDIC insurance is only for banks. Brokerages are covered by SIPC instead.
https://www.sipc.org/for-investors/what-sipc-protects
Last edited by celia on Thu Aug 11, 2022 5:48 pm, edited 1 time in total.
lstone19
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Re: Proceeds from home sale: wire or cashier's check?

Post by lstone19 »

wingman4uz wrote: Thu Aug 11, 2022 5:39 pm I’ve done this a couple of times and have used wires. I would happily do so again. Wire fraud is, however, a thing so I would ensure the escrow/closing firm have rock solid protocols to prevent that. I don’t think it matters where you wire the money to and the FDIC thing you just have to get over.
With my recent closing (described earlier), I provided them the information they wanted on their form plus a copy of my Fidelity statement showing the account number but also printed the instructions Fidelity provides on their website. And just to be sure, the title company called to verify that I did want it going to Fidelity and to verbally verify the account number. A lot of checking and double-checking.
exodusNH
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Re: Proceeds from home sale: wire or cashier's check?

Post by exodusNH »

tuningfork wrote: Thu Aug 11, 2022 3:54 pm I will be selling my home soon and have been asked whether I want the proceeds by wire or cashier's check. The amount will be over $500,000 and some of the proceeds will be used a few weeks later toward purchasing a new home.

1. Wire or cashier's check: which do you prefer, and why?

2. Would you use a traditional bank or Fidelity? I have accounts at both, and both have local offices nearby.

3. Would you be concerned that the amount is over the FDIC insurance limit of $250K?
Whatever is more convenient / faster for you.

Regarding FDIC limits, if it's a joint account, you're actually protected to $500,000.

You can also add two beneficiaries to get it to $500,000 on a single account.

The chances of a bank that's not already under distress going under in a few weeks is so remote that it's not worth worrying about.
Mako
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Re: Proceeds from home sale: wire or cashier's check?

Post by Mako »

I'd do a wire. Never had a problem with one. With a check you'll need to go into a branch because the amount is so high. Just make sure you quadruple check all the wire info and you'll be fine.
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tuningfork
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Re: Proceeds from home sale: wire or cashier's check?

Post by tuningfork »

Thanks everyone! I will do a wire, triple checking everything. That's what I was leaning toward when I asked, but wanted you all to help me with the pros and cons. In past transactions (30 years ago) I always took the cashier's check directly to the bank, no mail involved.
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Stinky
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Re: Proceeds from home sale: wire or cashier's check?

Post by Stinky »

FWIW - I've been involved in two real estate closings in the last month.

As a seller, the closing agent didn't give me the option of a wire. It took 7 business days for my credit union to make the funds available from the check that I received at closing. (Stinks!)

As a buyer, the closing agent required a wire transfer for any balance due of $5,000. I assume that they'll also wire out the money to the seller.

Go with a wire. All the way.
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Chardo
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Re: Proceeds from home sale: wire or cashier's check?

Post by Chardo »

Wire is better, though it's fun to hold a million dollar check in your hands and give it to a teller.
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samsoes
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Re: Proceeds from home sale: wire or cashier's check?

Post by samsoes »

What recourse is available to the intended recipient of the wire if the funds are wired to the wrong location?
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galawdawg
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Re: Proceeds from home sale: wire or cashier's check?

Post by galawdawg »

Receiving proceeds by wire transfer is a wise choice. Interesting that a cashier's check was the other option given you and so many other posters. In Georgia, it is common that the closing attorney disburses closing proceeds by a check on their escrow account.

An elderly relative refused to accept a wire transfer of the closing proceeds when he sold his house to move into assisted living, despite my advice. Instead, he insisted on a check. He later regretted that decision after standing for thirty minutes (leaning on his walker) at a BOA branch and getting the third degree when he simply wanted to deposit the law firm's escrow account check (in its entirety) into the BOA checking account that he had maintained there since the mid-1970s. Then they put a five (5) business day hold on the funds! He subsequently moved his investments from Merrill Edge to Schwab and his banking from BOA to Schwab Bank and has been very happy with Schwab's service, they treat him very well.

But even between a cashier's check (where funds are made available quickly) and a wire, a wire is the most convenient and expedient way to get your proceeds into your bank/brokerage.
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Re: Proceeds from home sale: wire or cashier's check?

Post by MikeG62 »

Wire would be quicker in terms of funds availability, but you won't know the wire hit your account until after the closing is over. If there is a problem (very, very low risk) you'll be chasing it down after the sale. With a bank check, you will be handed it at the closing and it should be money good, but the issue will then be how long it takes for your bank to release the funds post deposit. And potentially no interest earned during that time (or very little interest). With a wire to Fidelity, you'll earn interest from the time the funds hit your account (in your settlement account or MMF). I think I'd go with the wire as others have suggested.
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vested1
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Re: Proceeds from home sale: wire or cashier's check?

Post by vested1 »

I used a cashier's check on the first of three transactions, all of which were over 500k. The first was from the title office we used in California on the sale of our house there to Fidelity because I didn't trust my bank to get it right as they had been making a lot of errors on our accounts (Chase). I walked the check, very nervously, one block from the title office to the local Fidelity office and deposited it. The house had been in a trust so I had to open an separate trust account at Fidelity in order to deposit it, according to Fidelity.

The second transaction was a wire transfer and went from the trust account at Fidelity to the real estate lawyer's office in SC that was handling the cash purchase of our new home. That home, and the next one we bought were not placed in a trust. Every real estate transaction in SC requires a real estate lawyer to be involved.

The third was a wire transfer and went from our new real estate lawyer's office on the sale of our first home in SC to the real estate lawyer's office for the 2nd house in SC which we were buying for cash, so no additional wire transfer was needed involving Fidelity or a bank. This transaction was less complicated than the one before involving Fidelity (no in and out).

I felt much more comfortable when going through a lawyer's office and in using wire transfers, rather than being handed a check. The information on each wire was verified multiple times before and on the day of the transfers.
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Re: Proceeds from home sale: wire or cashier's check?

Post by 8foot7 »

One thing I've always wondered is what happens when the finance clerk at the lawyer's office fat-fingers an account number (say, 12345678 into 12346578) and it happens to be a valid account number at the destination bank? I know most banks have an account number format with some built-in checksums, but typos can be random and I wouldn't dream to say it's impossible for proceeds to end up in the wrong account.

I assume the lawyer has insurance for this. I'm sure the money isn't just gone, at least from the seller, although I suspect the lawyer's office is on the hook for making the error even if you signed a bunch of waivers, etc. In any event most troublingly I doubt one is made whole the same day in the event this happens, which could cause a number of issues with subsequent closings, if the seller is buying another home and needs the good funds as a down payment.

Not really a reason not to wire, but just curious.
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Re: Proceeds from home sale: wire or cashier's check?

Post by UNCHEEL »

Wire.

Sadly, Cashier's Checks can (and do) get forged.
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Re: Proceeds from home sale: wire or cashier's check?

Post by obgraham »

Agree with most everyone else: Wire.
However, I've learned the hard way that closing companies do not place the same value on accuracy that you or I might with our own funds. I also have an unusual spelling in one of our names. The closing clerks are often not highly trained, and I've had errors in spelling, account numbers, and in dollar amounts.

Therefore I insist on ALWAYS checking the final documents myself for accuracy. When the clerk says "it'll be a while", I'm always "fine, I'll wait."
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Re: Proceeds from home sale: wire or cashier's check?

Post by galawdawg »

obgraham wrote: Fri Aug 12, 2022 3:58 pm Agree with most everyone else: Wire.
However, I've learned the hard way that closing companies do not place the same value on accuracy that you or I might with our own funds. I also have an unusual spelling in one of our names. The closing clerks are often not highly trained, and I've had errors in spelling, account numbers, and in dollar amounts.

Therefore I insist on ALWAYS checking the final documents myself for accuracy. When the clerk says "it'll be a while", I'm always "fine, I'll wait."
A wise practice. In fact, many closing attorneys I know provide a copy of the wire instructions for the proceeds to the seller at closing for them to review and initial or sign if correct.
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Re: Proceeds from home sale: wire or cashier's check?

Post by random_walker_77 »

Wire transfer gives the "cleared" funds the quickest. If your bank doesn't charge to receive wires, even better. At 500K though, that's almost besides the point. At 2% on 500K, interest is $27/day so it really is a case of time-is-money.
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Re: Proceeds from home sale: wire or cashier's check?

Post by indexfundfan »

8foot7 wrote: Fri Aug 12, 2022 7:04 am One thing I've always wondered is what happens when the finance clerk at the lawyer's office fat-fingers an account number (say, 12345678 into 12346578) and it happens to be a valid account number at the destination bank? I know most banks have an account number format with some built-in checksums, but typos can be random and I wouldn't dream to say it's impossible for proceeds to end up in the wrong account.
I believe the receiving bank has to match the name as well. If the account number was entered wrongly, the credit will be delayed but you won't lose the money.

Many years ago I was waiting for a credit from a wire transfer. After waiting for a day, I contacted the sending party (a credit union), and it turns out that the account number was entered incorrectly. They told me the wire will be rejected by the receiving bank and they will resend it. And that is exactly what happened. I received the money after some delay.
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MrJedi
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Re: Proceeds from home sale: wire or cashier's check?

Post by MrJedi »

Wire for the speed, safety, and convenience. As mentioned, even if you have a wire fee, daily interest at today's rates on that high of an amount ends up being enough to make a difference between eating a fee vs. a slower check deposit if squeezing out money is your priority.
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Re: Proceeds from home sale: wire or cashier's check?

Post by Gill »

Shackleton wrote: Thu Aug 11, 2022 4:13 pm Just did this… $1.5M wired to my Fidelity account. No problems, no concerns.
Same here, same amount to my Vanguard account. Considered having it wired to my bank account but it would have taken two weeks to invest it. They had a cap on outgoing wires of $500k every three days. Glad I discovered that beforehand.
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