WIRE YOUR FUNDS!

With new banking regulations and fraud procedures, “Good Funds” or “Collected Funds” may take longer to clear and become unrestricted funds. The State of Washington law regarding funds deposited into an escrow reads:

“An escrow agent shall not make disbursements until the next business day after the business day on which the funds are deposited unless the deposit is made in cash, by interbank electronic transfer, or in a form that permits conversion of the deposit to cash on the same day deposit is made.”

Escrow can only authorize recording of closing documents when all funds on deposit have been “collected” or cleared. Escrow cannot accept the following types of deposits:

• Money Orders stop payments can be placed on these after issuance.
• Cash – escrow has no way to securely handle large sums of cash
• Foreign Currency – escrow cannot be responsible for exchange rates
• ACH (Automatic Clearing House Transactions) Deposits into an escrow trust account must be associated with a specific escrow number and a specific branch’s account. ACH transfers do not make this possible.

To help avoid a delay escrow will give you instructions for making your final deposit. Most escrow companies follow guidelines similar to these:
If deposit for closing is less than $500,000.00:
Payment may be made in the form of a Cashier’s or Official Check drawn on a Washington bank.
These funds must be on deposit 24 hours before escrow can authorize recording of the documents to close your escrow. If funds are not received in this form, your closing could be delayed at least one day and as many as ten days* while the escrow company confirms that the funds are “good” or cleared. (*possibly longer on investment account checks)

If your deposit for closing is $500,000.00 or more:
Your funds MUST be deposited by wire transfer. Wired funds are not subject to the clearance procedures that can delay a closing. This form of deposit is by far the most efficient for all parties involved in the transaction. Escrow will provide you with proper wiring instructions.

The law is very clear on what the requirements are for good funds. Be reminded this also covers a deposit such as Earnest Money that may need to immediately be refunded if a transaction fails. Again, escrow must comply with the Good Funds Law.

Please talk to our escrow staff members if you have questions about deposits.