Cashier’s check vs wire transfer for closing: What’s the difference?

If you’re closing the purchase of a new home, you’ll typically pay your closing costs by cashier’s check or wire transfer.

These payment methods are safe and secure for large payments – and many closing agents require homebuyers to use a bank-certified payment method.

We take a look at the key differences between a cashier’s check vs wire transfer, including speed, fees, pros and cons, and which transfer method is best for you.

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How to use a cashier’s check for closing

A cashier’s check is a check guaranteed by your bank. Unlike a personal check, a cashier’s check won’t bounce. Before sending your check, you’ll first need to transfer sufficient funds into your bank’s account.

When your payee deposits the check, they’re guaranteed to receive their funds within a day or so. During closing, you get permanent access to a new property title, so you need to use an approved payment method.

You can get a cashier’s check from a bank or credit union, but you may need an account with the institution to qualify. If you don’t have an account, the bank may require you to pay the full amount in cash.¹

Let’s take a look at how to use a cashier’s check for closing – your step-by-step guide.

Step 1. Go into your local bank branch and give your teller the transaction details, including the check amount and the payee’s information

Step 2. The teller will transfer the funds out of your account, print out a check, and sign it for you

Step 3. Take your guaranteed cashier’s check to your real estate closing to show that you can cover any property purchase costs¹

To send your cashier’s check, you’ll need:

• your recipient’s name
• a valid photo ID
• sufficient funds in your account²

You can also order a cashier’s check online at some financial institutions. You’ll follow the same steps, but your bank will send your check in the mail.¹

How to use a wire transfer for closing

A wire transfer is an electronic payment method often used for sending large chunk sums, such as the down payment on a new home.

You can use a wire transfer to directly deposit funds into your recipient’s bank account. Wiring money for closing is fast and secure, but you may need to pay a bank fee for the transaction.

It’s easy to wire money in the US or abroad. You’ll need to pay the issuing bank to send your wire transfer – and you can’t typically stop a wire once you’ve sent it.¹

To send your wire transfer, you’ll need to provide your financial institution with a few key pieces of information, including:

• how much you want to send
• a government-issued ID, such as your driving license
• your recipient’s contact information
• your recipient’s account number
• your recipient bank’s routing number²

Make sure to check with your bank before sending your wire transfer, as different financial institutions may require different information.

What’s the difference between a wire transfer and a cashier's check?

There are a few key differences between sending a wire transfer or a cashier’s check. Wire transfers are typically better suited to larger payments, but they can be more expensive than cashier’s checks.

Let’s take a closer look at the difference between a wire transfer and a cashier’s check.

Cashier’s check	Wire transfer
Cashier’s checks are typically less expensive than wire transfers. For example, a US Bank® check costs 10 USD³	Wire transfers can be more expensive than cashier’s checks. It costs 30 USD to send a US Bank domestic wire to another provider⁴
There may be a limit to how much you can send via cashier’s check. For example, Capital One® limits online cashier’s checks to 500,000 USD daily⁵	Wire transfers are suited to large payments like real estate closing costs
Once deposited, your recipient will receive their funds in roughly 1 to 2 days¹	Domestic wire transfers may reach your recipient within a few hours¹
You’ll get a paper trail for your cashier’s check²	Wire transfers are digital. This means they may be harder to track²
You can reverse or amend your cashier’s check before your recipient deposits the funds²	You can’t typically change a wire transfer once you’ve sent it.² Check with your bank if you think you’ve made a mistake

Cashier’s check vs wire transfer: Which is better for closing costs?

The choice between a cashier’s check vs wire transfer can depend on a number of factors, such as your personal financial situation, where you’re closing the property sale, and your closing agent’s rules and regulations.

Wire transfers are a popular choice for real estate closing, as they can be more flexible than checks. You can make a domestic or international wire transfer – and you can send your funds electronically.

You can also make larger payments, whereas some banks limit how much you can send by cashier’s check. You may also need to wire money for closing if you’re buying a property abroad.

However, if you’re making a smaller payment – or you prefer a physical payment method – a cashier’s check may be the best option. For example, cashier’s checks are useful if you need to guarantee your funds but don’t want them to be deposited until you’ve completed a final property inspection.

Speak to your real estate agent, closing agent, or lawyer to understand the best choice for you.

What are the disadvantages of a wire transfer?

Wire transfers are a quick and easy way to send secure funds for closing. However, they can be quite expensive, especially if you’re making a large payment.

For example, Capital One charges 30 USD for domestic wires. You may also experience additional fees from the receiving bank.⁶

Although wire transfers are safe, there’s still the possibility of fraud. Look out for unexpected requests for money and make sure to carefully check the payment details before sending your funds.

Never wire money unless you’re sure of the recipient. As wire transfers are typically irreversible, you could lose out on a significant amount of money if you don’t send your payment to the right person.

Speak to your banking institution for further advice and support about your transaction.

What are the disadvantages of a cashier’s check?

You can use a cashier’s check to show that you have the necessary funds to close your property purchase. However, there are a few drawbacks to this payment method.

Many banks may require you to pick up your cashier’s check in person. This can be time-consuming and inconvenient, especially during the stressful house-buying process – and it means you can’t use a cashier’s check for a virtual closing.

Some banks limit how much you can send by cashier’s check. This may be an issue if you’re making a large down payment for your new home.

You’ll also need to keep your cashier’s check safe until you pay your recipient – and you may need to pay a small fee to get your check. For example, Chase® charges 10 USD per cashier’s check.⁷

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Cashier’s check vs wire transfer FAQs

Still not sure whether to use a cashier’s check or wire transfer for closing? Let’s take a look at some frequently asked questions.

Which is faster: wire transfer or cashier’s check?

Wire transfers are often faster than cashier’s checks because there’s no intermediary. You can send your funds online, typically within a matter of hours.

This means you may be able to wire funds on the day of closing, whereas cashier’s checks can take several days to clear.

However, international wire transfers may take longer to reach your recipient. If you’re sending money abroad by wire transfer, expect your funds to take 1 to 5 days to reach your recipient.⁸

Is a wire transfer safer than a cashier’s check?

Both cashier’s checks and wire transfers are safe to use for large payments, but wire transfers may be considered more secure.

You can send your funds immediately, whereas if you mail a cashier’s check or give it to your real estate agent, you won’t have confirmation that the funds have been correctly deposited.

However, you may find a cashier’s check more reassuring, as you can physically give the payment to your recipient or closing agent – and it’s easier to track or retrieve your money if you fall victim to a scam.

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If you’re closing on a house, you need to think about how to pay your closing costs. Buying a house can be expensive – and you may need to make a large down payment or cover real estate and legal fees.

Every transaction is different. The right payment method for you depends on regulations set by your closing agent and when you need to make your payment.

If you can’t get to the property closing, wiring funds for closing is a convenient way to settle any fees. However, a cashier’s check is a cost-effective physical option for smaller closing costs.

To make your down payment overseas, check out Wise to send money to 160+ countries.

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Sources:

1. Smart Asset - Cashier’s check vs. wire transfer for closing on a house
2. Northside Legal - Cashier’s check vs wire transfer
3. US Bank - How much does a cashier's check or money order cost?
4. US Bank - Other service fees
5. Capital One - What is a cashier’s check?
6. Capital One - Wire transfers guide
7. Chase - Other fees
8. Money Transfers - How long does a wire transfer take?

Sources checked 07.30.2024