With the advent of online banking and online bill pay over the last decade it has become less important to be able to walk into your local bank branch to do business for the day to day consumer. Not everyone banks somewhere that is ubiquitous in every city in the country like Bank of America or Regions Bank. Some people choose to stay with a credit union or a local bank in the town that they are from. In other cases people bank with large national banks like Chase or Citi that don’t have branches here in St. Louis. I have had this come up with a couple of clients recently who were relatively recent transplants to the St. Louis area.
This works fine for paying the electric bill, direct deposit, and withdrawing cash from a local ATM but it can throw a snag in the closing process when you are buying a house. When buying a house the buyer has to bring a certain amount of money to the table on the closing date. This figure depends on the down payment, closing costs, and any credits negotiated with the seller. The main point of this post is that all title companies require the buyer to bring in a cashier’s check for this amount. The only other option is to wire the funds.
Usually this conversation doesn’t come up until the day before closing when the title company and lender work up the final total and give us the figure and we instruct the buyer to get a cashier’s check for that amount. If there is no local branch then this will not be possible. The only option left is to set up a wire from your bank account to the title company. This can take a day or two set up so its best to be aware that this needs to be done well ahead of time.
If you don’t bank locally just be aware that these fund have to be certified or wired. Let your realtor, title company, and lender know that you don’t bank locally so they can give you instructions on how to handle the situation. Ask your title company for wire instruction in the form of an email so you can read them. Call your bank’s customer service department and ask if they can either overnight a cashier’s check set up a wire for the closing date. There will be a small fee for each option but that is the cost of doing business.
This is something most buyers and agents don’t think about ahead of time. Its best to be aware of it and bring it up early so you don’t have any delays in closing or funding. This way you get the keys to your house on time and can move right in!