Hi, been a long time since I used this site, but got a question now.
I’m buying a house in cash, doing the transaction remotely so far but will be in person for the closing. The money is coming from mutual funds at Vanguard. What’s the best way to do this - would I wire from Vanguard, or transfer into a bank account for a certified check or wire from there?
One complicating factor is that my bank doesn’t have branches in the area I’m moving to, so I can’t easily get a certified check at closing. I could do it ahead of time before I travel, but that doesn’t leave room for adjusting the amount at closing if necessary.
Alternatively, I could open a new account at a bank with branches where I am now and where I’m moving to (which I probably want to do anyway.) Is this a good way to do it, or will a house-sized amount of money moving through a new account trip all sorts of fraud alarms?
I’m buying a house in cash, doing the transaction remotely so far but will be in person for the closing. The money is coming from mutual funds at Vanguard. What’s the best way to do this - would I wire from Vanguard, or transfer into a bank account for a certified check or wire from there?
I have had a few closings in the past couple of years and they only want money wired so I would say make it easy on yourself and wire from Vanguard.
What’s the best way to do this - would I wire from Vanguard, or transfer into a bank account for a certified check or wire from there?
I would suggest wiring the money, rather than trying to get a certified check.* Whether you can wire directly from Vanguard is something that you will need to confirm with them. Typically, when I take money out of my Vanguard accounts, I have only gotten the option to wire to a bank account that I own. But I haven’t ever asked if I can wire money to a non-associated account, so I don’t know if they allow it, or if they require you to jump through some hoops. So check with Vanguard first. If you find that it’s not allowed, or there are too many hoops to jump through, then move the money from Vanguard to your bank a few days early (long enough for the money to settle) and wire it from your bank.
Do note: There are lots of real estate wire scams where people are sent an e-mail with closing instructions ‘from the title company’ - except it’s not, and the money disappears. So be sure you get the wiring instructions directly from your closing agent, not an e-mail.
*I did get a certified check when I was buying my current house, and was doing the closing in a city between my old place and my new place. The nearest bank to my closing location was about 350 miles away, but was on my route, so I figured it wouldn’t be an issue. The closing company couldn’t come up with exact figures so I overestimated, figuring I would get a check in the mail in a week or so, when I would be at my new house. The title company overnighted it the next day to my new house, and didn’t give me any other options to get the money. I was still travelling and didn’t get there for another week. Luckily, the overnight envelope was still there, with my check.
I’d check with vanguard about options for wiring cash out.
And I’d ask your closing company / title insurance company about what options you have.
Possibly your closing company can receive your funds as a deposit into an account 7 days (or some other # of days) before your closing, and therefore ensure that the funds are good.
Also, I’d make sure the title insurance was sufficient - usually having a mortgage means the mortgage company makes sure the title is clean and the title insurance is sufficient to protect them (and therefore the buyer)
Most states (if not all) have limits on title companies accepting cashier checks. So your only option most likely will be to wire funds a day or two prior to closing. For example, in Illinois 50k is maximum for a cashier’s check. Anything over 50k must be wired. Indiana’s limit is much lower.
When I bought my new house in 2020 I moved the money from my broker to my bank the same way I always did. I then did a wire transfer from my bank to my attorney where it was in his escrow account until the closing. He, in turn, wired it to the seller’s attorney.
When I sold my old house in 2021 my attorney ended up with the money in his escrow account after it was wire transferred from the seller’s attorney. I picked up a check at his office a few days later.
That was just two transactions, both here in Connecticut. YMMV.
(When I was buying (late August 2020) it was deep in covid lock down. I discovered my nearest bank branch was completely closed. When I showed up at a branch that was open I discovered I was supposed to have made an appointment. It was a task for one of the people who worked behind a desk, not a teller. Thankfully someone was available or I’d have been in a pretty pickle.)
Thanks all for the advice, particularly AJ, I remember you from when I spent more time here years ago.
I’ll wire from Vanguard, I found their support page with a good list of instructions, yes you can do a one-time wire to an outside account for a purchase such as a house.