Wire Transfer Questions

Thanks to our legal gurus at the state and with Mike Shepard for the following information about the proper handling of wire transfer fees. [Register for the Member Meeting Legal Update next week!] With our recent shift to handling transactions online and virtually when possible, we have seen a rise in buyer’s seeking to wire their deposit payments to bind a Purchase and Sale agreement.  For the listing broker, aka “escrow agent”, there may be fees associated with receipt of wired funds. The escrow account needs to be made whole, in some manner, to match the deposit indicated in the P&S… if it says $1,000, then the amount at closing needs to be $1,000.  Solutions (in order of preference by legal counsel):

  • Talk to the bank requesting no fees: Banks may agree not to charge for incoming wire fees for properly setup real estate escrow accounts.
  • Talk to the bank about fees: Some listing brokers have arrangements with the bank to take the fee out of their operating account instead of their escrow account. The deposit amount remains whole.  Before agreeing to accept a wire, you can make a reimbursement agreement, if desired.
  • Some listing brokers direct the buyer or the buyer’s agent to increase the wire by the amount of the fee.  If the P&S calls for $1,000, they request that the buyer wire $1,018.95, to include a bank fee of $18.95 for receipt of wired funds. MUST BE EXACT! NOT GUESSING NO ROUNDING
  • If all else fails, the Escrow Agent must put the wiring fee into the escrow account to make it whole. The broker has to understand that once it is deposited that money is no longer theirs and is part of the deposit.

Wiring fees can be cost of doing business to receive good funds immediately.  Alternately, the broker could tell the buyer there are bank fees that must be reimbursed in order to receive the buyer’s wire – or ask the seller to reimburse the fees because there is clearly value to have the money immediately.