During a real estate transaction, it is common for many title companies, real estate brokers, and others in the industry to utilize electronic money transfers for closing costs. Wire transfers are also convenient for other payments such as providing earnest money or fees for other transactions related to the mortgage process. Wire transfers are typically preferred over checks because they allow for the funds to be available to the recipient immediately.
Similar to wire transfers and also preferred over checks, electronic money transfers via an electronic payment system offer additional benefits to both the sender and the recipient, such as quick transfer of funds and less risk of fraud or bounced checks. Overall, electronic money transfers are the preferred choice by many in the real estate industry who wish to advance their business and optimize service and convenience for clients.
Are Electronic Money Transfers Safe?
Before delving into the reasons you should use an electronic money transfer for real estate transactions, you might want to know about the supposed risks involved. You’ve probably heard a lot about wire fraud scams, and while it is certainly true that there are a lot of unscrupulous individuals out there that will attempt to steal money via a wire transfer, the process is completely safe when you are sending money to a person you know and trust.
The only time you really want to avoid sending money to someone via a wire transfer is when you are dealing with someone you’ve never actually met, such as someone selling goods online through Craigslist or the Facebook Marketplace.
And although real estate wire fraud is also an issue, so long as you make sure you are dealing with a lender or real estate broker that you know and trust, an electronic money transfer is the way to go. Here’s why…
1. Safety and Security
As mentioned above, when sending money to people you know, electronic money transfers are actually one of the safest methods. An electronic funds transfer is performed by your bank or financial institution and can be done over the phone, in person, and, depending upon your bank, on the Internet via an online banking portal. The funds are sent from your bank account through a secure network, to the account information you provide, which is given to you by the title company, lender, or real estate broker. Consequently, wire transfers are a safe way to ensure that the funds needed for closing are received by the proper party in a timely manner.
Using electronic money transactions to initiate an electronic money transfer for real estate closings eliminates the risk of cashier’s checks getting lost or stolen, or waiting for the funds to clear from a regular check. They are also ideal for virtual closings taking place overseas or instances where you can’t attend the closing in person.
For improved safety and security, many in the real estate industry recommend using a secure payment platform such as paymints.io. The system is well protected and facilitates secure, encrypted payments, keeping your bank account information private, significantly decreasing the risk of wire fraud. A user simply that wants to make a transfer to another bank account number simply creates an account and inputs their checking account routing number and other details. Then, the electronic money transfer can be made at any time, without the need for a trip to the bank.
After a lengthy mortgage process, the last thing you want is for your closing to be delayed. The fastest way to get your closing costs paid so that you can proceed is with electronic payments. And while your bank can certainly be speedy when initiating a wire transfer, a money transfer platform can complete transfers within a few minutes. This ensures that there are no delays due to banking schedules or cutoff times or waiting a few business days for paper checks to clear.
Real estate brokers can even request earnest money payments or other fees via a money transfer platform, and then receive those payments in minutes, ensuring the mortgage process moves along smoothly. This way, there is no need to waste time setting up appointments to hand off a check or waiting for a check to clear. Real estate brokers or sellers don’t need to worry about bounced checks, and title companies don’t need to wait for checks to arrive in the mail.
There is an additional speedy option that is slowly gaining in popularity but not currently available at all banks yet. It is real time payments (RTP), a payment option for individuals and businesses that transfers funds nearly instantaneously. Real time payments solve a number of challenges and facilitate payments for B2B transactions, payroll, P2P transactions, and more. While RTPs have been in use more heavily in countries such as China, the UK, and India, the United States has been slow to adopt this money transfer option. Real time payments are expected to gain momentum in the United States States over the coming years.
During the mortgage process, home buyers often have to run around collecting various financial documents and banking statements, as well as attend various meetings with the real estate broker. Electronic payment systems add a significant amount of convenience to an otherwise inconvenient process. A payment platform designed to initiate electronic money transfers for real estate transactions makes it easy for brokers to request funds within minutes, and consequently receive them from the buyer, who can initiate the transfer with ease from the comfort of their own couch.
There’s a lot of different payment apps out there, and other payment methods such as PayPal or Venmo. But for the real estate industry, a money transfer platform like paymints.io is ideal. There is no need to waste any time calling the bank to set up the transfer. Once the banking information is inputted into the platform, funds can be transferred nearly instantly without any additional action or contact with a bank.
4. Ideal for Real Estate Professionals
Electronic money transfers are also often used for e-commerce transactions, bill payments, credit card payments, direct deposits for payroll, and more. But, for all the reasons mentioned above, real estate professionals will benefit greatly from electronic money transfers. Whether you’re a real estate broker or a lender, or even the contact at an escrow company, you’ve got a lot on your plate and plenty to do each day. The last thing you want to have to do is fit in time to meet with buyers and sellers to collect payments.
Using an electronic money transfer system in lieu of collecting bank checks or cashier’s checks saves you a lot of time during the day and ensures you can dedicate plenty of time to focus on other important tasks. This can help to reduce stress and grant you peace of mind, and ultimately transform your business.
Everyone in the real estate industry and both buyers and sellers know that a mortgage process is at times stressful and perhaps even confusing. There’s a lot involved and a lot of different tasks to juggle throughout the day. But if at least one thing task can be performed more easily, to the benefit of all, it helps to alleviate some of the stress and ensure that the process can keep operating as smoothly as possible.
Electronic money transfers via a secure, reliable, and compliant money transfer platform is the solution, serving to save borrowers, buyers, sellers, and real estate agents time and money. An electronic money transfer through paymints.io combines speed, instant confirmation, and an informational solution that is more efficient than any other payment options.
You can discover more important industry-related information and resources by visiting real estate blogs and forums.
Get started using a secure electronic money transfer system for earnest money deposits, closing costs, and other fees. Schedule a free demo of paymints.io today.
Originally published on August 28, 2020. Updated on September 1, 2022.