What Info Is Needed for a Wire Transfer: A Title Agent’s Guide

While the process can be full of emotion, stress, and paperwork for them, your job is to safeguard the clients’ money and real estate assets per the agreement that they have come to.

One key aspect of this role is supporting the completion of a successful wire transfer during the closing process to clear the financial terms of the deal.

So when buyers ask you what they need to complete a real estate closing wire transfer, here’s the key information you need to know and that buyers need to act on.

How does a wire transfer work?

A wire transfer, also known as a bank transfer, credit transfer, or electronic funds transfer, is a transfer of money from one bank or credit union to another.

The wire transfer process utilizes the Society for Worldwide Interbank Financial Telecommunication network, Clearing House Interbank Payments System, or Fedwire network to facilitate the transfer from within the same bank, another domestic bank, or even internationally to a bank in another country.

With the average mortgage balance coming in at $241,815 in 2023, buyers have to work with their mortgage lenders, title agents, and the seller’s bank to generate and facilitate these large wire transfers as part of the closing process. 

Often, this amount can be even higher if the buyer needs to finance other costs, such as closing costs, other related fees, real estate agent commissions, or any down payments from separate funds. The title agent is often very involved with the distribution of these various funds.

What key info is needed for a wire transfer?

While banks and credit unions may have their own unique forms, rules, and guidelines, generally the same steps and types of info are needed for the wire transfer.

For example, initiating a wire transfer depends on the options a bank provides. In some cases, banks require the customer to come in to initiate large transfers while others allow customers to initiate wire transfers online.

In either case, the information clients will need to initiate the wire transfer includes:

• The wiring instructions from the title or escrow company
• The title or escrow company’s escrow account information (the financial institution’s name, an account number, and a routing number)
• The total amount to be transferred
• The account information for the source and destination bank accounts

At this stage, it’s critically important that title agents emphasize the need for buyers to double-check the information that they are using to initiate the wire transfers because funds can be very difficult and time-consuming to reverse once they get started.

What are some best practices for a real estate closing wire transfer?

Given the importance of the wire transfer process as part of a real estate closing, buyers and title agents can feel stressed during this phase of the transaction. 

To help simplify, secure, and streamline the real estate closing wire transfer process, title agents can focus on following these best practices:

‍Educate buyers on the key wire transfer steps. 

From inspections to mortgage loan qualifications, buyers have a lot of to-dos and documentation to juggle.

Take the time as early in the process as possible to educate buyers on the communications and documentation to be on the lookout for from your office and what to expect during the closing process. 

This can be especially helpful for first-time home buyers, ensuring that they have the time to work with this bank to compile the necessary information and ready the funds. At the same time, this can help to raise awareness about the tactics that criminals use to initiate wire fraud.

‍Have clients track the wire transfer with its Federal Reference Number.

The wire transfer process is quick—happening usually the same day or overnight—and you should encourage buyers to ask for and retain the Federal Reference Number for their transaction.

Also known as the Fed Ref, this 16-20 digit number from the bank receipt can be used to track the wire transfer in case there are any issues.

‍Utilize a secure platform to validate user identities.

Unfortunately, about 1 in 3 wire transfer transactions in 2020 included one form of wire fraud attempt, and real estate transactions were the top target for criminals.

While the tactics they use can vary, title agents can ensure the security of the wire fraud account information collection phase by using a platform that offers secure, end-to-end encryption. After validating user identities, buyers and sellers are then able to securely share their wiring information for the title agent to use to prepare the wiring instructions. 

Bring it all together.

Buying a home can be a stressful and complex time, even for experienced buyers. Add in the growing threat of wire fraud, and parties can feel overwhelmed by the process.

That’s why the skill, knowledge, and tools that title agents have are more important than ever. 

Fortunately, by following these best practices and utilizing an industry-leading platform such as CertifID to secure the wire transfer information process, title agents can offer clients the peace of mind that they need during this exciting time.

Want to learn even more about how to secure your business from the risk of wire fraud and other threats? Then we welcome you to check out our latest resource, Cybersecurity Measures You Can Implement To Protect Your Business.

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