"Good Funds" At Title

[Bryan Hancock]

We've been purchasing a lot of product lately on short contracts to be competitive in the Austin market. A closing we had recently got a bit chippy and the title company the seller selected failed to tell us we needed to wire funds in advance for them to be considered "good funds." Since I was attending the closing to sign documents anyway I just brought a cashier's check with me to save on the wire fee. I told the title company I'd be happy to wire the funds if the seller would pay for my wire fee.

Things are going to work out with this deal despite the seller being a real jerk, but I was wondering if anyone has heard about laws for this. I don't think there is a requirement for "good funds" specified anywhere in TREC contracts and I would think the person that selects the title company should be obligated to make sure their procedure is followed if they wish to receive funds the day of closing instead of waiting on the hold for cashier's checks.

Opinions? Does anyone know what different states say about this? This transaction is in Texas.

[Jeff Clawson]

There's no law requiring a wire, but I have had several title companies require a wire in order to fund the transaction the same day. They've started doing this because of fraudulent cashiers checks. They will still accept a cashiers check, but they will have to verify the funds with the issuer which could delay funding for a day. So, if the seller is expecting to be paid at closing, then it could be an issue.

The title company should have informed you upfront of this. Most good closers will include this info when they send out the HUD. The fact that they didn't, speaks to their lack of attention to detail and poor customer service skills. I would not close with them again.