What are good funds?
Good Funds are funds that are immediately available to the title/escrow company upon deposit. Depending on the type of funds deposited, a waiting period may apply before they can be disbursed or transaction can be closed.
The Good Fund Law is intended to protect the consumers. When a party makes a deposit into escrow, there must be verification that the amount deposited is fully available to be disbursed at the time of closing.
Hawaii’s standard purchase contract states that closing occurs and the proceeds are to be disbursed to seller when the recording occurs.
First Hawaii Title has a fiduciary responsibility to the parties to our escrow transaction to confirm that we have “good funds” in escrow from the buyer’s initial deposit, additional deposit(s) and lender’s closing funds.
Personal checks or Mainland Cashier’s Checks: This may take up to 10 days in order for the checks to clear. Personal checks or Mainland Cashier’s Checks may not be used for closing funds if the closing/recording will take place within 10 days.
Bank wires: We encourage all customers to send funds via wire transfer. These funds are available for immediate credit and can be disbursed most quickly, to ensure a timely closing.
Cashier’s checks: Before a bank will issue a cashier’s check, they will verify there are funds available in the account. Cashier’s checks are considered good funds once deposited and cleared in our trust account. This takes 1 to 3 days, depending on the issuing bank. Cashier’s checks must be issued within the same state as the title/escrow branch handling your closing, or it will be treated as a personal check and can delay closing.
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First Hawaii Title must receive the total amount of good funds from the parties by 11:00 a.m. – two business days prior to the scheduled closing/recording date in order to proceed with closing.
ACH Transfers: These are different from a standard bank wire. Both are completed electronically, however ACH transfers can be recalled up to 90 days after the transfer is completed and without approval. This does not meet good funds requirements, and is therefore not an acceptable form of funds. Our bank will block these transfers requests, and may not notify us on us of the delay.
Money Orders: It is company policy not to accept money orders for transactions. They are not considered guaranteed funds by most lending institutions, as they are unable to verify the source.