Good Funds

Congratulations, it is time to Close your real estate transaction. The title company just called and the closing time is set, but don’t start coasting yet.  You still have to deliver  “GOOD FUNDS” to the title company.

What does that even mean?  It means real money, where the checks have cleared and can’t be withdrawn.  In 1988, the State Board of Insurance adopted Procedural Rule P-27, which requires that “Good Funds” be received and deposited BEFORE a title agent may disburse from its trust fund account. 

The term “Good Funds” is defined as: 

(1)  Cash or wire transfers;

(2) Certified Funds, including Certified Checks and Cashier’s Checks;

(3) Uncertified funds in amounts less than $1500.00 (example:  a personal/company check)

and

(4) Uncertified funds in amounts of $1500 or more, drafts and any other item when collected by the financial institution. 

Items 1-3 are pretty self-explanatory.  If you want to write a check that is $1500.00 or more, call your title company immediately.

By and far, wire transfers are the most popular method of moving large sums of money and all you need are the Title Company’s  wiring instructions and your bank can take it from there.

One last thing.  Wire fraud is on the rise, so be ever vigilant.   Next week, we will describe some typical wire fraud scenarios for you to watch out for, so check back next week for more information.