Why should you have funds wired in your real estate transaction?

Alison Noger, title representative and branch manager from North American Title Company in Towson shares why in this guest post. Thank you, Alison!



“Good funds” is primarily a title and escrow term.  “Good funds” requirements are the minimum state-imposed requirements relating to escrow practices.  In Maryland, lender’s “good funds” refer to the following:

1.    Cash

2.    Wired funds

3.    Certified check

4.    Check issued by  a political subdivision

5.    A teller’s check issued by a depository institution and drawn on another depository institution

6.    A cashier’s check, or

7.    A check drawn on a financial institution that is insured by FDIC, FSLIC, or MDIF (MD Insurance Fund) and which is located in the 5th Federal Reserve District. (RP 7-109)

“Available Funds” refers to funds your bank makes available to you when a deposit is made.  Deposited funds are made conditionally available by your bank to you as a provisional credit to your account, based upon the likelihood that the funds will eventually be collected.   If the paying bank ultimately declines to pay a check, your bank will eventually reverse the provisional credit and the “available” funds will be deducted from your account.

“Collected Funds” are actual funds, not provisionally “available” funds.  A check has been presented to the paying bank and actual payment of the funds (by the paying bank) has been received.  This can take days and potentially weeks to be completed.

So even if lender or Buyer brings a certified/cashier’s check to closing, your escrow agent may have difficulty disbursing immediately (thus potentially delaying settlement).  The agent may have “available funds”, but not “collected funds.”  Hence, it is always wise to strongly encourage all parties to deposit funds to escrow through federal wire. A Federal Wire received is “collected funds.”

*Note also, beware if a party attempts an ACH (automated clearing house) wire.  An ACH is subject to reversal by the originator.


Thank you to Alison Noger from North American Title! You can find information on Alison and North American Title Company at www.nat.com . Alison’s office is right on Kenilworth Drive in Towson!