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I've recently entered into the escrow relationship for a home purchase and I'm seeing the following language show up in an email.

Please do NOT send an Electronic "ACH" transfer, as our bank does not accept these.

I'm curious why a bank would not have this capability for funds transfers? Is there fee or technology demands getting ACH payments set up? Why would someone chose not to accept this form of payment? In case it's context dependent, this email was in response to getting the earnest money deposit setup.

brhans
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jxramos
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2 Answers2

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Because ACH payments are reversible.

Title companies are going to require a wire transfer because those payments are not reversible. Which is also why you will receive several documents and emails telling you to beware of scammers contacting you as your closing date approaches with "updated" instructions for where to wire the money. If you fall for one of those scams and wire the money to the wrong account, your bank can't reverse the transaction for you.

Justin Cave
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In case it's context dependent, this email was in response to getting the earnest money deposit setup.

The earnest money deposit is to convince the seller that your offer is to be taken seriously, because you can forfeit the money if you back out of the deal unless it is one of the agreed conditions.

The bank that is going to hold the funds wants to limit your ability to pullback the funds. They will only release the funds back to the bidder or to the settlement process based on the written instructions from all parties.

Please do NOT send an Electronic "ACH" transfer, as our bank does not accept these.

They should have specified your options regarding these funds. I have seen cases where the funds could be paid by regular check, and cases when it has to be a certified check.

mhoran_psprep
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