How to Wire Money for a Closing: A Definitive Guide

Wiring money for a closing might seem like a simple electronic transaction, but it’s a high-stakes game where a single misstep can cost you dearly. You need to execute the wiring process meticulously to avoid potential fraud and ensure a smooth and secure real estate transaction.

In essence, you wire money for a closing by obtaining precise wiring instructions from the closing agent (title company or attorney), verifying those instructions directly with the closing agent via a phone call to a known and trusted number, and then initiating the wire transfer from your bank or financial institution, double-checking all information before confirming the transaction.

Understanding the Stakes: Why Accuracy Matters

Before diving into the “how,” let’s underscore the “why.” Real estate transactions are prime targets for cybercriminals. They intercept emails, impersonate parties involved, and provide fraudulent wiring instructions. If you send money to the wrong account, recovering it can be extremely difficult, if not impossible. Therefore, diligence is not optional; it’s paramount.

Step-by-Step Guide to Safe Wiring

1. Obtain Wiring Instructions Directly

Never, ever use wiring instructions sent via email without independent verification. Email is easily compromised. Instead:

• Request wiring instructions directly from your closing agent (title company or attorney). Ask them for a physical copy or a secure portal link.
• Insist on a phone conversation to confirm the instructions. Obtain the closing agent’s phone number from a source you trust – their website, a previous communication (verified), or the realtor. Do not use the number in the email containing the wiring instructions.

2. Verification is Key: Call and Confirm

This step is non-negotiable.

• Call your closing agent at the verified phone number. Do not skip this step!
• Read the wiring instructions aloud and ask them to confirm each detail. Pay close attention to the bank name, account number, routing number, and the beneficiary name (usually the title company’s escrow account).
• Ask clarifying questions. If anything seems even slightly off, investigate further.

3. Initiate the Wire Transfer

Once you’ve verified the instructions, proceed with the wire transfer.

• Visit your bank or financial institution in person. This provides an extra layer of security and allows you to speak directly with a bank representative. While online transfers are possible, in-person verification is always the safest route.
• Provide the verified wiring instructions to the bank teller or representative.
• Double-check all information before authorizing the transfer. Bank tellers are human and can make mistakes. You are ultimately responsible for ensuring the accuracy of the information.
• Request a confirmation receipt. This document serves as proof of the transaction.

4. Monitor the Transaction

• Keep a close eye on your bank account. Ensure the funds are debited as expected.
• Follow up with the closing agent to confirm receipt of the funds. Don’t assume everything went smoothly just because the money left your account.

Red Flags: What to Watch Out For

• Sudden changes in wiring instructions. If you receive new instructions unexpectedly, especially via email, treat them as highly suspicious.
• Requests for secrecy or urgency. Fraudsters often pressure victims to act quickly without verifying information.
• Typos or grammatical errors in emails or documents. These can be indicators of phishing attempts.
• Wiring instructions that differ from previous communications. Always question any inconsistencies.

Alternative Payment Methods

While wiring is common, explore alternative options if you’re uncomfortable.

• Cashier’s Check: This is a safer option, but it requires obtaining the check from your bank and physically delivering it to the closing agent.
• Certified Check: Similar to a cashier’s check, but may have different verification requirements.
• Automated Clearing House (ACH) Transfer: In some cases, ACH transfers may be possible, but they often have transaction limits.

The Bottom Line

Wiring money for a closing demands vigilance and proactive communication. Never take wiring instructions at face value, always verify directly with the closing agent, and remain skeptical of unsolicited communications. A few extra minutes of caution can save you a significant amount of money and stress.

Frequently Asked Questions (FAQs)

Here are 12 FAQs to address common concerns and provide further clarity:

1. What if I receive wiring instructions via email that look legitimate?

Even if the email appears to be from your closing agent, never trust it implicitly. Contact the closing agent directly using a verified phone number to confirm the instructions. Do not use the contact information provided in the email itself.

2. What if the closing agent’s phone line is busy and I can’t reach them?

Do not proceed with the wire transfer. Keep trying until you can speak directly with the closing agent. If you’re consistently unable to reach them, contact your realtor or lender for assistance. They may have alternative contact information or be able to facilitate communication.

3. Can I verify the wiring instructions by emailing the closing agent?

No. Email is not a secure method for verifying sensitive information. You need to speak with the closing agent directly by phone.

4. What information should I verify with the closing agent when I call?

Verify every detail of the wiring instructions, including the:

• Bank name
• Bank address
• Account number
• Routing number
• Beneficiary name (usually the title company’s escrow account)
• Beneficiary address
• Reference number or notation

5. What if the bank teller tells me the wiring instructions are correct?

While the bank teller can verify the validity of the routing and account number, they cannot guarantee the legitimacy of the beneficiary. You still need to verify the instructions with the closing agent.

6. What if I accidentally send money to the wrong account?

Contact your bank immediately. They may be able to initiate a recall of the funds. Also, contact the closing agent and law enforcement to report the incident. However, be aware that recovering funds sent to a fraudulent account is often difficult and not always successful.

7. Is it safer to wire money online or in person at the bank?

Wiring money in person at the bank is generally considered safer. It allows you to speak directly with a bank representative and have them review the instructions with you. Online transfers are convenient, but they lack the same level of in-person verification.

8. How much time do I need to allow for the wire transfer to complete?

Wire transfers typically take a few hours to one business day to complete. Check with your bank and the closing agent to confirm their processing times. Plan accordingly to ensure the funds arrive before the closing date.

9. What are the fees associated with wiring money?

Wire transfer fees vary depending on your bank and the amount being transferred. Expect to pay between $25 and $50 for a domestic wire transfer. Inquire about the fees before initiating the transfer.

10. Can I use a credit card to wire money for closing?

Generally, no. Wire transfers typically require funds to be debited directly from a bank account. Credit card companies usually treat wire transfers as cash advances, which come with high fees and interest rates.

11. What should I do if I suspect fraud?

Report it immediately! Contact:

• Your bank
• The closing agent
• The FBI’s Internet Crime Complaint Center (IC3)
• Your local law enforcement agency

12. Is title insurance enough to protect me from wiring fraud?

No. Title insurance protects you from defects in the title of the property, such as liens or ownership disputes. It does not cover losses due to wire fraud. Protecting yourself from wire fraud requires proactive measures on your part.

By following these guidelines and staying vigilant, you can significantly reduce your risk of falling victim to wire fraud and ensure a smooth and secure closing process. Remember: when it comes to wiring money, caution is not just advised, it’s essential.