We hear this question often from our clients—what methods of payment are acceptable at the closing table?
Aside from the fact that no one wants to sit at the closing table for hours counting out a few hundred thousand dollars’ worth of singles, a bag of money will not suffice for closing. Cash is acceptable up to $1,000, but most sellers require certified or bank checks (which is stated in the Contract of Sale). There are many reasons why cash is unacceptable—counting errors can occur or the cash can easily be stolen after closing.
Personal checks are usually not accepted either. Certified or bank checks provide better assurances for the seller, buyer, lender, and title insurance company by creating a precise accounting of what is being paid. Since there are many fees associated with closing, multiple checks allow for a streamlined transaction.
Certified or bank checks also provide the greatest level of security and reliability. They should not be endorsed, and should generally be payable to the seller directly. However, the seller has the right to direct the buyer to write the balance check(s) to another party, such as the bank the seller is paying off.
While these are the generally accepted rules, we recommend speaking to your real estate attorney for more information, and to confirm what you will need to provide to make sure that your closing goes smoothly.