How to Pay for Extras at Closing With a Cashier's Check
During the negotiation of a purchase agreement for a home, car or business, many people agree to pay extra costs beyond the actual purchase price. The buyer must bring the additional funds to the closing, and typically a title agent collects the funds and ensures that everything conforms with the terms of the purchase agreement. Title companies normally require cashier's checks, which people can buy from banks because the checks represent guaranteed funds, as opposed to regular personal checks that can bounce.
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Instructions
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Review your purchase contract. If you are buying a home, you should receive a copy of the purchase contract from the real estate agent or attorney who prepared it after all parties have signed it. The contract should detail the exact amount that you must bring to closing. If you are closing on another kind of loan, call your lender or the other party involved in the transaction to find out how much you need to bring. If the extra payment involves multiple fees, get an overall total and a breakdown of the per-item costs.
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Call the title agent and find out who or what to list as the payee on the cashier's check. Typically, you make checks payable to the title company, and that company then disburses funds to each party. However, the sales contract may stipulate that you must make the check payable to another party such as the seller or a contractor. Make sure you get the full name and correct spelling of the payee.
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Go to your bank and use one of your own checks or a generic withdrawal slip to make a withdrawal for the exact amount of the cashier's check. Ask the teller to use the funds to purchase a cashier's check. Provide the teller with the name of the payee and ask the teller to list you as the remitter. Inspect the check to make sure the teller printed it correctly.
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Attend the loan closing. Hand the check to the title agent and sign the closing documents. The title agent distributes the funds. Most cashier's checks have a carbon copy you can keep for your own records. If the check does not have a carbon copy, ask the title agent for a receipt.
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Tips & Warnings
Some banks charge fees for issuing cashier's checks. Pay any fee with cash or a separate check to create a simple paper trail. If you add the check fee into the withdrawal amount that funds the cashier's check, it could cause confusion further down the line when your bank statement shows a withdrawal amount that exceeds the amount of the cashier's check.
Cashier's checks are issued with collected funds. If you deposit a check into your bank, it can take up to 11 days for the drawee bank to transfer funds to your bank, and you cannot get a cashier's check until the funds have been received.
