Bank Hold on Checks  If a broker has a client coming in from out of town carrying a bank check, they have to be very aware of deposit hold times.  This also holds true with clients consolidating funds even with local banks.  If you deposit money in a bank (even a bank check), there is a hold on the deposit.  Holds can vary from anywhere between 1-10 days, depending on the bank.  Please advise your clients to verify the availability of funds with their lender, in advance.   As Mike Shepard reports, “I am aware of two recent occasions where the closing had to be postponed because, although the funds were deposited locally, the local bank treated them as uncollected and wouldn’t issue a check during the hold time. This is not only an issue with transferring funds in preparation of a closing, but also if they are selling a home and plan to use the proceeds on the purchase.  Talk to the lender to prepare for closing in advance!

Wired Funds:  While many have procedures in place for accepting the secure wiring of funds, be aware that some lawyers and settlement companies are refusing to wire because of the increasing fraud risk.  Mike Shepard reports, “I had a couple selling in Burlington, Vermont.  The buyer’s lawyer in Burlington flatly refused to wire funds.  Fortunately Burlington is not that far away, so my client drove to the closing, sat in the parking lot, got the bank check, and drove the check to me to deposit in my IOLTA account.  We had available funds.

The bottom line is, if a broker is consulted by a client about getting funds ready for a closing, that broker should insist on the buyer client calling his lawyer and bank to understand the availability of funds and options for bringing funds to the closing table.