How to make sure you have "good funds" for your real estate closing

Wire transfers are a very common aspect of the real estate settlement process. But for many consumers, the purchase of a home is their only exposure to wire transfers, which can lead to confusion and unnecessary stress. 

To clear up any confusion and to help prepare our clients for settlement, here is rundown of some of the questions we hear and things to consider regarding wire transfers.

I wired directly via my bank’s website and money has left my account – why don’t you have it yet?

This is a question I have gotten more than once.  Did your bank charge you a fee for this "wire"?  The answer to this follow-up question, is usually "no" or "I paid a small fee." What your bank may not be telling you is that you are actually ordering an ACH (Automated Clearing House) transaction and not a wire directly from your bank to our bank.  

You will need to check in with your bank prior to sending out funds to make sure the fee you are paying is for sending a wire and not a fee for an expedited ACH.  Our bank will not accept ACH transactions for the purchase, because the ACH funds are not considered good funds.

Why aren’t ACH funds "good funds" for purchasing my home?

An ACH goes through a clearing house. Because these are bulk transactions, the funds are not "liquid," or immediately available funds. ACH funds can be adjusted, changed or recalled by the clearing house without authorization from the accountholder. In general, our bank will not accept ACH funds for any of our accounts

Can I write a personal check?

The short answer is no. Personal checks are not considered immediately available funds. Unfortunately, not all personal checks are good when they are written – either by mistake or by design, clients sometimes fudge that funds are available. There are occasions when we can accept a personal check for a small amount of funds at closing.

What are "good funds" for closing?

A wire, cashier’s check, or a certified check is considered good funds. A wire is considered good funds because the funds are wired from your bank directly to our bank via the Federal Reserve and are immediately available. Another example of good funds would be a cashier’s check. These funds are immediately available from the bank.

A certified check is not often used as a vehicle for funds, but is still acceptable. A certified check is a personal check that has been stamped and certified by a bank official the funds are available in the account. The bank then make sure those funds are only good for that purpose. Banks rarely issue certified checks, as it is much easier to issue a cashier’s check. 

So, how do I make sure I have "good funds" for closing?

All banks are different. Have a conversation with your bank early in the process. Find out what your bank needs from you to wire funds. Ask your bank if there are any fees involved to wire funds and how much lead time the bank needs for getting funds to closing on time. Also, make sure you coordinate with your settlement agent and lender to ensure you have the correct bottom line and have the amount of funds to close readily available prior to closing.   

Taking these steps early really help to make the buying process a little less stressful.   

Close It!™ House of the Week: Spanish masterpiece with Potomac River Basin views

This week, we've stumbled across an amazing house in the Palisades neighborhood – a 1953 Spanish masterpiece according to the listing – that looks like it should be located in Napa Valley instead of Northwest Washington, DC. Sale price is $1.595 million.

The photo tour highlights several elegant features of this 4-bedroom, 2-bathroom home, including a gorgeous deck off the main level and a private patio above it off the master retreat. The house has three patios in all. Other features include arched doorways, built-in shelving and a commercial kitchen. 

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $366,298.90. Monthly payments with carrying charges would then be around $7,072.99 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

Close It!™ House of the Week: Delightful unit, tastefully updated

This week we're looking at a delightful 1-bedroom condo in DC's Barnaby Woods neighborhood, located just a block from Connecticut Avenue and about a mile from the Friendship Heights metro stop. It's listed for $264,990.

Previous owners made lots of updates to this light-filled unit, including a chef's kitchen and a fabulous bath with jet tub. This unit also has a covered patio as well as a separate storage unit. 

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $62,620.26. Monthly payments with carrying charges would then be around $1,572.42 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

Close It!™ House of the Week: Beautiful blend of row home, condo living

This week we're going across town to check out a top-unit condo unit situated west of RFK Stadium and just a block or so from Lincoln Park in Capitol Hill East. It's listed at $475,000.

It's a 2 bedroom / 2 bathroom condo with private deck and two off-street parking spots. Plenty of sunlight streams in from three exposures. All together, it's about 1,100 square feet and just steps from Eastern Market, H Street, Barrack's Row and Capitol Hill. 

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $109,485.10. Monthly payments with carrying charges would then be around $2,253.33 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

5 marketing ideas for real estate agents from Close It!™

The best real estate agents are constantly on the look-out for ways to better market themselves to their home buyers.

And while the latest report shows it's 34% more affordable to buy versus rent in the DC metro area, many would-be homebuyers remain on the fence

How can you get these homebuyers off the fence – and then convince them to buy the fence along with the house that comes with it? Here are 5 ways Close It!™ can help you market your real estate business:

1. Follow up with clients by sharing Close It!™ in your email, social media or blogging campaigns. 

You've already got a database of email addresses, Facebook page likes and Twitter followers. Perhaps some of those contacts are would-be homebuyers who aren't quite sure if they can really afford to buy a house. Reach out to them about the only app in the region that calculates a homebuyer's total cash to close. It's a fun and useful tool that lets them crunch the numbers any way they want. 

2. Customize your Close It!™ reports with photo and contact info.

You're already working with several prospective homebuyers who no doubt have lots of questions about how much everything is going to cost in the end. Follow up on last weekend's house tour with a set of HUD-1s custom branded with your professional photo and contact information. Your homebuyers will be impressed when you outline every cost for them down to the penny.

3. Appeal to the foreign investor market.

If you're working in neighborhoods like Georgetown, Foggy Bottom and the West End, it's quite possible you've worked with foreign investors or that you will at some point. Did you know that sellers who do not participate in the U.S. tax system must pay the IRS a tax of 10% of the sales price for all properties over $300,000? A surprise like that at closing could cost you a client, or worse yet, merit you a negative online review. Close It!™ helps you better serve foreign clients by accounting for FIRPTA withholding along with every other nuance of real estate law and tax code for each jurisdiction.

4. Appeal to the first-time homebuyer market.

The first-time homebuyer demographic may make up a smaller share of homebuyers now compared to historic levels, but it's only a matter of time before an influx of millennial homebuyers causes it to explode. And the millennials, more than previous generations, are more likely to look to technology to help them gather information about the process. Be their guide. Keep up with real estate technology, including mobile apps, and share your favorite findings with your millennial homebuyers. Close It!™ is one app homebuyers in the DC metro region in particular will appreciate, but there are many more apps, tools and resources to discover. 

5. Appeal to the move-up buyer market with seller's calculator. 

For buyers in the move-up market, how much house they can afford often depends on how much money they can net from their existing home sale. Introduce those clients to the app that toggles between a net proceeds calculator for the seller side and a cash-to-close calculator for the buyer side. 

Close It!™ is a free iOS and Web app that helps real estate agents, buyers and sellers drill down the costs of buying and selling real estate.

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