How to Wire Money for Escrow Step-by-Step

Wiring money for escrow is a common and secure method for transferring substantial funds in financial transactions, particularly in real estate or large purchases. This electronic transfer system offers advantages over traditional checks due to its speed and enhanced security. An escrow service provides a neutral third party to hold funds until all transaction conditions are met, protecting both the buyer and seller. This ensures money is not released until agreed-upon terms are satisfied, mitigating risks for all involved parties.

Gathering Required Wire Details

Before initiating any wire transfer, it is essential to gather all necessary details directly from the escrow company. They will typically provide written wire instructions, often via encrypted email, which should be reviewed. These instructions are specific to the transaction and are essential for successful fund delivery.

The required information includes the full legal name of the beneficiary (the escrow company), their beneficiary bank name and address, and the beneficiary account number. For domestic transfers, an ABA routing number is required; international wires need a SWIFT/BIC code. A purpose or reference code, such as the property address or transaction ID, is often needed to ensure funds are correctly allocated. Each piece of information is important; even a minor discrepancy can cause significant delays or misdirection of funds.

Confirming Wire Instructions

Confirming wire instructions is a crucial step that directly addresses the prevalent risk of wire fraud. It is imperative to verify all details independently before any funds are sent, as wire transfers are largely irreversible. This verification process helps safeguard your funds against fraudulent schemes that often involve last-minute changes to wire instructions.

To confirm the instructions, call the escrow company using a legitimate phone number. This number should come from a trusted source, such as your contract, the company’s official website, or reliable communications, rather than any number provided within the wire instructions themselves. During this call, confirm the beneficiary name, bank name, account number, routing or SWIFT code, and the exact amount of the transfer. Cross-reference the written instructions with the verbally confirmed information. Be wary of red flags, such as unexpected changes to instructions, pressure to expedite the transfer, or instructions sent from unusual or suspicious email addresses.

Sending the Wire Transfer

Once all wire details are thoroughly gathered and verified, initiate the transfer through your financial institution. You can typically send a wire transfer through a bank branch; some banks also offer online or phone banking, often with specific limits or requirements for larger sums. For substantial amounts, such as those in real estate transactions, an in-person visit to a bank branch is often recommended or required.

When sending the wire in person, present valid identification and the verified wire instructions. A bank representative will assist you in filling out the necessary forms, ensuring all details are accurately entered. If using online or phone banking, input the verified beneficiary details, including the bank name, account number, and routing or SWIFT code.

Banks charge fees for outgoing wire transfers, with domestic outgoing fees averaging around $26 (ranging from $0 to $35), while incoming fees can range from $0 to $15. It is also important to be aware of your bank’s daily cut-off times, often between 2 PM and 5 PM local time, as transfers initiated after this time are processed on the next business day. Upon successful initiation, always obtain a confirmation or tracking number from your bank for future reference.

Verifying Fund Receipt

After sending your wire transfer, it is important to confirm that the funds have been received by the escrow company and applied to your transaction. Domestic wire transfers typically clear within 24 hours; some transfers within the same institution or through credit unions happen within minutes. Factors such as bank cut-off times and weekends can influence processing duration.

You should contact the escrow company, generally within a few hours to one business day after sending the wire, to confirm receipt. When you call, provide the confirmation or tracking number from your sending bank to help the escrow company quickly locate and verify your payment. If the funds are not received within the expected timeframe, promptly contact your sending bank with your confirmation number to trace the wire. Your bank can often initiate a trace to determine the status and location of the funds.