Cashier's Check
Definition and meaning of Cashier's Check in real estate.
A cashier's check is a payment instrument drawn directly from a bank's own funds and signed by a bank cashier or teller. Because the bank guarantees the payment, it is widely used in real estate transactions to ensure the security of large sums of money.
In more detail
When purchasing a home, buyers typically cannot use personal checks for closing costs because of the risk of insufficient funds. A cashier's check offers a secure alternative since the bank secures the money from the buyer's account before issuing the check. Title companies and closing agents usually require this or a wire transfer to finalize the purchase.
Buyers must purchase these checks in person at their bank branch, and banks typically charge a small administrative fee for the service.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Guarantor | The issuing financial institution |
| Typical fee | A small administrative cost per check |
| Primary use | Closing costs and down payments |
A home buyer obtains a cashier's check from their local bank for their down payment and closing costs, which they hand over to the closing agent at the closing table.
Frequently asked questions
Is a cashier's check the same as a certified check?
No, a cashier's check is drawn on the bank's own funds, whereas a certified check is drawn on the depositor's account with the bank certifying that the funds are present and set aside.
Can a cashier's check expire?
Yes, while they are valid for a long time, many banks place a notice stating they are void after a specific period, typically between ninety to one hundred and eighty days.