Why is a Buyer required to provide either a certified check, a cashiers or treasurers check or wired funds at Real Estate Closings where the amount is over $2,000?
Checks which fail to clear the bank can wreck havoc on a seller who uses proceeds from one closing to buy a new home. In a domino like effect, when one check is returned for insufficient funds or because it has been drawn on an insolvent account, all subsequent checks relying on those funds are also returned. While it has occurred infrequently in the past, when it has occurred, the problems have been monumental, e.g., unsatisfied mortgages requiring continued payment of interest on the seller’s old mortgage, ineffective transfers of property which impair the validity and priority of a buyer’s new mortgage and many overdrawn accounts. And this continues for each transaction dependent on the prior transaction. The Delaware Supreme Court has imposed rules intended to eliminate the potential problems created when at settlement a purchaser or lender tenders the settling attorney “uncollected” funds, e.g., checks drawn on insufficient funds or checks from an insolvent maker. No Delaware law
Related Questions
- Why is a Buyer required to provide either a certified check, a cashiers or treasurers check or wired funds at Real Estate Closings where the amount is over $2,000?
- IS THE BUYER ALLOWED TO REGISTER HIS REAL ESTATE IN THE LAND REGISTRY BEFORE PAYING PROPERTY TAX?
- Why must I bring a cashier’s check or have funds wired to the escrow agent?
