Closing Costs/Downpayment: Bank Draft or Certified Cheque

[Civuck]

It's after hours so we can't get a hold of our lawyer right now. So perhaps someone can answer in the meantime:

We are closing this week and meeting with the lawyer Wednesday afternoon. They've asked for a certified cheque for closing costs, legal fees, downpayment balance, etc.

However, after just speaking with the bank - apparently certified cheques are far more paperwork to prepare and require getting your home bank branch involved. The bank rep I spoke to recommended a bank draft instead which is much quicker.

Should a bank draft to cover these costs be as acceptable as a certified cheque?

[amhutap]

For my closing, I was able to use my debit card at Canada Post and get money orders made (many locations open till 9 pm), since the maximum is Cdn$999.99 I had to get many made which is what you probably will have to do. No issues with that. And...my daily ATM cash limit is nowhere near the amount I needed to be made into money orders and it was not an issue.

[AllWheelDrift]

A bank draft should be fine. It's pretty much the same as a certified cheque.

[duner]

????

Is the lawyer demanding this or would they just prefer it?

I paid all my fees including 250K downpayment with a regular non certified cheque. It's a waste of money to get a certified cheque/money order. It's not like you're going to run away with the house or something. As long as you give it enough time to clear, it's not a problem.

[MacGyver]

I used a bank draft. I can't see why it wouldn't be acceptable; it's as good as cash!

[dealtacular]

A certified cheque is more paperwork, but bank staff may be bring lazy as well.

For closing, generally both a draft or cert chq are acceptable. In both cases, the bank is guaranteeing the funds.


I used a bank draft. I can't see why it wouldn't be acceptable; it's as good as cash!

I understand what you mean, but that isn't really the case. The bank (in branch) can still put a hold on a draft if it can't be verified and won't for cash. Fake drafts are also rampant.


????

Is the lawyer demanding this or would they just prefer it?

I paid all my fees including 250K downpayment with a regular non certified cheque. It's a waste of money to get a certified cheque/money order. It's not like you're going to run away with the house or something. As long as you give it enough time to clear, it's not a problem.

What if the other party needs the cash to clear immediately? This isn't $20. They may need the money to give to another bank for a downpayment or for another purchase if they are moving. A regular cheque is fine if you are willing to wait, but often that isn't possible.

[Rishi]

However, after just speaking with the bank - apparently certified cheques are far more paperwork to prepare and require getting your home bank branch involved. The bank rep I spoke to recommended a bank draft instead which is much quicker.
If I phone ahead I can have order a certified cheque to be picked up later in the same day at RBC. I don't know why your bank is making such a fuss about it.

[tng11]

Certified cheque = bank draft. Both are guaranteed funds and certified cheques are actually more expensive. Only reason I can think why they may want a certified cheque is because it has your signature as well as address on it. A certified cheques takes just about as much time as a bank draft to do from my experience. They take your cheque, verify the signature and your ID, take the funds from your account, then they emboss the cheque, put a stamp on it, sign it and it's all done. I got a certified cheque a few months ago and it took 15 minutes.

[UrbanPoet]

Bank draft is easier and faster...
and Personally I think it looks way more official... Its actually really easy to forge a fake certified check compared to a draft.

[Ducky]

+1 for bank draft.

[Terente]

It's after hours so we can't get a hold of our lawyer right now. So perhaps someone can answer in the meantime:

We are closing this week and meeting with the lawyer Wednesday afternoon. They've asked for a certified cheque for closing costs, legal fees, downpayment balance, etc.

However, after just speaking with the bank - apparently certified cheques are far more paperwork to prepare and require getting your home bank branch involved. The bank rep I spoke to recommended a bank draft instead which is much quicker.

Should a bank draft to cover these costs be as acceptable as a certified cheque?

i had a certified check done in 5 min over the counter and it wasnt even my branch.TD WAS THE BANK. costed me around 6 dollars for 900 check.

[Sct4]

Just did the same thing a bank draft is perfectly fine.

[bloomflower]

Bank Draft & Certified Cheque is same thing, depends on where you go, they call it different things. If the lawyer needs to confirm it's real, when they bring it to their bank. Ask your banker who makes you the bank draft/certified cheque to give you a business card to bring to them. They can call your banker right away to verify it. Besides those things have the address of where it's made, they should be able to find the phone number and call to verify it. Yes, a bank draft/certified cheque will usually cost you $ though, since there is more paperwork, depending on the type of account you have, it might be free. But if it's a downpayment, it would be a large amount and you don't want to be walking about with cash anywayz. BTW, I don't know which bank/credit union you're dealing with. But as long as the money is in your account, and it shows where you got it, then you shouldn't have a problem getting the certified cheque. That is with no other outstanding problems on your account.

[Civuck]

This has been an extremely helpful forum - thanks everyone for your responses!

We have our bank draft now and meet with the lawyers later today. They confirmed the bank draft was fine.

One interesting side note - for whatever reason, we've been told by the lawyer we need to meet with them twice - before the close (today) and on the close (Friday). Our agent says this is unusual as typically you only meet once on closing day. I guess we will find out why later.

C.

[Ducky]

meeting the lawyer twice is normal...

first meeting to get all the paperwork done (downpayment, closing costs, etc)

second meeting is to get the keys? (you don't actually need to see the lawyer for this)