When you’re closing on the purchase of a home, you normally have to pay a large sum of money in the form of either a cashier’s check or a wire transfer. These are two ways of transferring cash without having to carry and hand over any bills. Both are also more secure than personal checks, but there are some differences between cashier’s checks vs. wire transfers. Cashier’s checks cost less than wire transfers, but may not be accepted for large sums. Wire transfers cost more, but are faster and can be used to pay large amounts. A financial advisor can provide you with insight and guidance for all sorts of financial transactions.
Paying At Real Estate Closings
Real estate closings often involve the buyer paying tens or even hundreds of thousands of dollars for closing costs, down payments and other expenses. In the case of an all-cash transaction, the buyer may pay the entire cost of the home.
For security reasons, the title companies that oversee closings rarely accept payments in the form of actual cash. And, because it can take several days to confirm that a personal check is good, personal checks aren’t accepted, either. Instead, buyers at real estate closings normally pay with either cashier’s checks or wire transfers.
Sometimes the buyer can choose the method they prefer. Often, however, the title company will specify that funds need to be made available in one of these forms. When you’re preparing for closing, you can ask the real estate agents involved or the title company if you’re expected to pay via cashier’s check vs. wire transfer.
Cashier’s Check
Cashier’s checks are guaranteed by the bank they are drawn on. That means the check won’t bounce or be returned for insufficient funds. This is vital for real estate closings, where the title to a property is being permanently transferred. For that reason, homebuyers often use cashier’s checks to pay the money due at closings.
Most banks and credit unions will provide cashier’s checks. To get one, you need enough money in your account or, if you don’t have an account with that bank, sufficient cash in hand to cover the full amount of the check. Present yourself at the bank teller window with your identification, the amount of the check and the payee’s name.
The bank will transfer the funds from your account, or accept the cash deposit, and print out a check with all the information. The teller will sign the check, at which point you can use it at a real estate closing. You may also be able to do all this online and receive a printed check by mail.
Some banks will issue cashier’s checks for customers at no cost. Others charge a fee, typically from $10 to $20.
It may take a day or so for the amount of the check to be credited to an account after it’s deposited. However, the bank guarantees the check will be paid. This is unlike a personal check, which may take days to be credited and could be returned unpaid for insufficient funds.
Cashier’s checks can be issued for any amount, but title offices may not accept cashier’s checks above a certain amount. This cap could be as low as $10,000 or as high as $50,000. Scams involving fake cashier’s checks are not uncommon, which is one reason title offices are wary of using them.
Wire Transfer
A wire transfer involves a direct transfer of funds from one bank to another, using an electronic system. A wire transfer can deposit funds into the recipient’s account much faster than a cashier’s check. It may take as little as a few hours (if you request an expedited transfer), although in some cases could take a day or two before the funds are available. An international wire transfer may take several days.
To do a wire transfer, you need the payee’s name and address as well as their bank account number and the routing number of the bank where they have their account. As with a cashier’s check, you have to pay the issuing bank either cash in the amount of the transfer or transfer the funds from your account to the transferring bank’s account before the transfer will be initiated. Once the transfer has begun, it can’t be stopped and the funds will be transferred to the receiving bank account.
Wire transfers fees are higher than the fees cashier’s checks. You may pay $10 to $30 to send a domestic wire transfer from one U.S. bank to another. International transfers may cost up to $75. The recipient may also have to pay a fee of $10 to $20 to their bank. In addition to being faster, wire transfers are seen as more secure and are more likely to be accepted when large sums are involved.
Choosing Cashier’s Check or Wire Transfer
Here are key characteristics of cashier’s checks vs. wire transfers for comparison:
| Payment form | Cost | Speed | Security | Size |
| Cashier’s check | Less expensive | One to two days or more | Good as long as care is taken | May be limited to $10,000 |
| Wire transfer | More expensive | As soon as hours | Highly secure | Good for paying larger sums |
Bottom Line
Cashier’s checks and wire transfers are commonly used to pay fees, down payments and sometimes the full purchase price when a homebuyer is closing on their home. There are several differences between cashier’s checks vs. wire transfers, and situations in which each are preferred. Cashier’s checks cost less, but may not be accepted for amounts over $10,000. Wire transfers can move money in hours instead of days, are preferred when large sums are being transferred, and are less subject to scams, but also cost more.
Homebuying Tips
- A financial advisor can help evaluate your ability to purchase the home you want. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Use SmartAsset’s Mortgage Calculator to estimate your house payment including taxes, insurance and fees.
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