# Taking a large check from a service member: Good or bad idea? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [May 29, 2019, 10:27pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741 "2019-05-29T22:27:45Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [May 30, 2019, 8:06pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/21 "2019-05-30T20:06:53Z")
> [@robby](#): > > I thought the whole point of escrow was to take care of issues like this. Every time I purchased and sold a home, a lot of money was going back and forth for partial utility payments/credits, the amount of heating oil in the tank, etc. On one occasion, the seller had promised to have the house power washed but never got around to doing it before the closing, so they offered us $250 at the closing to pay for the power washing. Our real estate attorney took care of all of this, figured out who was owed money at the end, and wrote a check out of escrow. AIUI, since this is an allowance and we don’t have a fence company picked out, any check written to us from the title company would be considered an enticement. If we had a company (closing is next Monday), it could come from proceeds. ---
**Author:** ![Disgscen](https://avatars.discourse-cdn.com/v4/letter/d/f05b48/32.png) [@Disgscen](https://boards.straightdope.com/u/Disgscen)\ **Post date:** [May 30, 2019, 8:16pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/22 "2019-05-30T20:16:38Z")
Do you have a real estate attorney involved? Have the seller give your attorney the $3000 check for escrow, for the fence. Normally you’d do something like this through the _seller’s_ escrow, so you only get the actual cost, maxed at $3000. In this case it seems like the $3000 is agreed. They give it to your attorney, your attorney cuts you a check. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [May 30, 2019, 8:23pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/23 "2019-05-30T20:23:43Z")
> [@Joey\_P](#): > > I would talk to [someone?] and just have a clause in the contract that states that you get a $3000 check, from the seller, at closing. Let them work out the details, but then you’ll have the cash that day and the bank will likely handle writing the check and handing it to you. This probably can’t be handled in that manner due to the enticement concerns that the OP referenced in an earlier post. A closing attorney (who represents the mortgage company, by the way) will shut down the closing in a heartbeat if they get any sense that the seller is returning money to the buyer. It’s too close to a kickback scheme. For that reason, this probably should have been handled via the purchase contract as an allowance (new home contracts often cover buyer allowance for appliances, upgrades, etc.). > [@Dallas\_Jones](#): > > Will the entire sale of the property be held in escrow until the check finally clears all of the banks involved? If not, you can kiss that $3000 good bye, you are not going to get it. This is flat wrong. Circumstances similar to this happen frequently in home sales, albeit moreso from the buyer to the seller. When I bought my house recently the previous owner and I made a deal for me to buy the tractor and implements. It was, of course, contingent on the closing going through, but on our real estate agents’ advice we could not combine the deal with the closing nor could we exchange funds (a personal check, BTW) at the closing table due to enticement concerns. **Nars** the only thing that is not clear from your OP that may be a red flag is whether a separate, signed contract exists outside of the home purchase agreement that covers the fence allowance. That contract could even specify a “bank check no later than 4 business days after closing”, or similar. Neither decent realtor is going to want to do anything that may irritate the mortgage company/closing attorney and potentially screw the deal. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [May 30, 2019, 8:43pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/24 "2019-05-30T20:43:53Z")
> [@Disgscen](#): > > Do you have a real estate attorney involved? Have the seller give your attorney the $3000 check for escrow, for the fence. Normally you’d do something like this through the _seller’s_ escrow, so you only get the actual cost, maxed at $3000. In this case it seems like the $3000 is agreed. They give it to your attorney, your attorney cuts you a check. I do not have a real estate attorney. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [May 30, 2019, 8:54pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/25 "2019-05-30T20:54:12Z")
> [@Doctor\_Jackson](#): > > **Nars** the only thing that is not clear from your OP that may be a red flag is whether a separate, signed contract exists outside of the home purchase agreement that covers the fence allowance. That contract could even specify a “bank check no later than 4 business days after closing”, or similar. Neither decent realtor is going to want to do anything that may irritate the mortgage company/closing attorney and potentially screw the deal. Yes. The addendum to our signed sales contract says “Seller to provide $3000 for a fence allowance to buyer.” Unfortunately, that’s all that it says. ---
**Author:** ![TruCelt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/trucelt/32/523_2.png) [@TruCelt](https://boards.straightdope.com/u/TruCelt)\ **Post date:** [May 30, 2019, 10:15pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/26 "2019-05-30T22:15:59Z")
> [@Nars\_Glinley](#): > > When the contract was written and signed a month ago, it was considered an allowance. My realtor told me that it can’t be part of the closing because that would be an enticement and those are a no-no. > . . . > [@Doctor\_Jackson](#): > > This probably can’t be handled in that manner due to the enticement concerns that the OP referenced in an earlier post. A closing attorney (who represents the mortgage company, by the way) will shut down the closing in a heartbeat if they get any sense that the seller is returning money to the buyer. > . . . IANA real estate attorney or a mortgage lender. Take my opinion with a grain of salt, but . . . The key here is that the money is coming from the buyer’s loan; it isn’t currently sitting in anyone’s bank account. And the loan is a mortgage loan, not a home improvement loan, which have very different regulations, stipulations, and interest rates. So it’s actually the buyer who is in danger of doing something wrong here AIUI. The right thing to do, would be to contact your lender and let them know there is a small improvement necessary to the property and you’d like to add $3k improvement to your loan package. Unless you are right on the edge of approve-ability, I would think that would be no problem. ---
**Author:** ![Dag\_Otto](https://avatars.discourse-cdn.com/v4/letter/d/439d5e/32.png) [@Dag\_Otto](https://boards.straightdope.com/u/Dag_Otto)\ **Post date:** [May 30, 2019, 10:59pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/27 "2019-05-30T22:59:41Z")
Uh, how does borrowing more money help the buyer in any way? ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [May 30, 2019, 11:02pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/28 "2019-05-30T23:02:44Z")
> [@TruCelt](#): > > The right thing to do, would be to contact your lender and let them know there is a small improvement necessary to the property and you’d like to add $3k improvement to your loan package. Unless you are right on the edge of approve-ability, I would think that would be no problem. If I understand you correctly, that $3000 would essentially be coming out of my down payment and would put my down payment under 20% and then I’d have to pay PMI. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [May 31, 2019, 12:59am UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/29 "2019-05-31T00:59:44Z")
> [@Doctor\_Jackson](#): > > It was, of course, contingent on the closing going through, but on our real estate agents’ advice we could not combine the deal with the closing nor could we exchange funds (a personal check, BTW) at the closing table due to enticement concerns. Can you explain what “enticement concerns” means in this context? ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [May 31, 2019, 1:01am UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/30 "2019-05-31T01:01:19Z")
> [@Dag\_Otto](#): > > Uh, how does borrowing more money help the buyer in any way? The way it stands now, it seems like the buyer is taking a loan for $3000 to give to the seller, in order for the seller to give it back to the buyer. ---
**Author:** ![Dag\_Otto](https://avatars.discourse-cdn.com/v4/letter/d/439d5e/32.png) [@Dag\_Otto](https://boards.straightdope.com/u/Dag_Otto)\ **Post date:** [May 31, 2019, 1:57am UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/31 "2019-05-31T01:57:20Z")
If I were the seller, I would like that. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [May 31, 2019, 12:54pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/32 "2019-05-31T12:54:37Z")
> [@Dag\_Otto](#): > > Uh, how does borrowing more money help the buyer in any way? > [@Slash1972](#): > > The way it stands now, it seems like the buyer is taking a loan for $3000 to give to the seller, in order for the seller to give it back to the buyer. There are schemes where the seller and buyer work as a team to defraud lenders on mortgage loans. One such scheme is, at a high level, where someone buys a house at a below market price, conspires with a buyer (and sometimes an appraiser as well) to flip the home at an inflated price. When the seller gets the difference in cash at closing they split it with the buyer who then walks away from the mortgage. Beyond that, though, kickback schemes of various kinds have existed in the RE market since there was a RE market. Lenders want the mortgage deal to be squeaky clean to lower their risk, any hint of money changing hands under the table is highly frowned upon. IANAR (realtor), I am giving this info as it was given to me by both agents prior to closing on my house about 6 months ago. ---
**Author:** ![not\_what\_you\_d\_expect](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/not_what_you_d_expect/32/3246_2.png) [@not\_what\_you\_d\_expect](https://boards.straightdope.com/u/not_what_you_d_expect)\ **Post date:** [May 31, 2019, 1:29pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/33 "2019-05-31T13:29:24Z")
This is very old information, but back in the 80’s or 90’s, I handled all of the small claims cases for our office. We had sold a Recreational Vehicle to a member of the Army. This person failed to make some payments to us, but we were unable to sue him in small claims because he was not stationed in the area. Or something like that. I can’t recall all of the details, but this could be a concern for you. ---
**Author:** ![Dag\_Otto](https://avatars.discourse-cdn.com/v4/letter/d/439d5e/32.png) [@Dag\_Otto](https://boards.straightdope.com/u/Dag_Otto)\ **Post date:** [May 31, 2019, 3:32pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/34 "2019-05-31T15:32:21Z")
> [@Doctor\_Jackson](#): > > There are schemes where the seller and buyer work as a team to defraud lenders on mortgage loans. Yeah, but this is **Nars Glinley** we are talking about. I’m assuming that the OP is not planning on committing fraud, but rather concerned about potentially being out $3k due to a seller moving out of state. So I don’t see how borrowing the $3k helps him in any way. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [May 31, 2019, 6:03pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/35 "2019-05-31T18:03:06Z")
> [@Nars\_Glinley](#): > > We are in the process of buying a house from a member of the US Army. One of the conditions of the sale is that the seller would give us a $3000 allowance for a new fence. This is to be paid to us at closing next week. Since they don’t have an extra $3000 lying around, they can’t give us a cashier’s check. They will have the money once we buy the house from them but I’ll have to take a personal check. My wife is kind of leery. I think she has the mentality (I don’t know where it came from) that “the army takes care of its own” and since the sellers are being relocated (from Oklahoma to Louisiana), that we’re taking a chance that we could lose out and be stuck. This screams ‘scam’ to me. It might just be some weird financial arrangement, but the fact that they are bouncing money around and want you to take the risk of a potential bad check seems really sketchy. The fact that apparently whatever arrangement you’ve arrived at is technically illegal is another big red flag, scams like to get you to do something ‘off the books’ to cut down on the ways you can try to recover. I have no idea why on earth you’d set up a complex transaction for tens to hundreds of thousands of dollars without springing a few hundred for a lawyer to make sure the documents are in order. There is probably some way to incorporate this into the final sales contract without an ‘enticement’ issue that a real estate lawyer could sort out. > [@](#): > > So, am I taking a risk by taking a check or is the risk less than from an average civilian? Probably the same. If you’d risk a $3k check from an out of state stranger bouncing then go for it, if not then the fact that they’re in the army doesn’t really change the risk. ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [May 31, 2019, 6:17pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/36 "2019-05-31T18:17:13Z")
Assuming the check is present when you’re signing, just call the bank and tell them you’d like to verify available funds on the account. “I have a $3,000 check drawn on SoAndSo’s account #xxxxxxxxx. Are there sufficient funds in the account to cover it?” Used to be how you did it, maybe banks don’t do that anymore. If not, maybe you just take the check to the bank right away for cashing. If it’s good you head back and finish the signing. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [May 31, 2019, 6:24pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/37 "2019-05-31T18:24:12Z")
> [@Inigo\_Montoya](#): > > Assuming the check is present when you’re signing, just call the bank and tell them you’d like to verify available funds on the account. “I have a $3,000 check drawn on SoAndSo’s account #xxxxxxxxx. Are there sufficient funds in the account to cover it?” Used to be how you did it, maybe banks don’t do that anymore. If not, maybe you just take the check to the bank right away for cashing. If it’s good you head back and finish the signing. If there were sufficient funds in the account to cover the check, then the entire situation wouldn’t happen because they could bring a cashier’s check or actual cash to the closing. The scenario is specifically that they cannot cover the $3000 check until the deal for the house is completed and the money from that deal is in their account. Until OP finishes the assignment, the other people certainly will not have money in their account. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [May 31, 2019, 6:24pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/38 "2019-05-31T18:24:49Z")
> [@Inigo\_Montoya](#): > > Assuming the check is present when you’re signing, just call the bank and tell them you’d like to verify available funds on the account. “I have a $3,000 check drawn on SoAndSo’s account #xxxxxxxxx. Are there sufficient funds in the account to cover it?” Used to be how you did it, maybe banks don’t do that anymore. If not, maybe you just take the check to the bank right away for cashing. If it’s good you head back and finish the signing. The way I understood the OP, the seller of the house will write a personal check for $3000. The buyer is not to cash it right away. At closing, the seller will get a check for the profit on the home (or purchase price or whatever). Then, the seller will deposit that amount. Once the money is available, the seller will then inform the buyer “Ok, you can cash that personal check now” That’s how I saw the original OP. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [May 31, 2019, 6:29pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/39 "2019-05-31T18:29:30Z")
> [@](#): > > Tell that to the lenders. They don’t care if it’s **Nars Glinley** or **Dirk Gently** , they have been burned like this before and want no part of it. Really - the seller and I could not, according to our realtor’s, exchange a check or keys for the tractor at the closing table. In fact, we were told not to even mention it. We settled up on that on in the parking lot afterward. [/quote] ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [May 31, 2019, 6:29pm UTC](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741/40 "2019-05-31T18:29:39Z")
Derp. Ya, so a post dated check. Nevermind. I’ll just be under this rock over here. [Previous page](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741.md?page=1) [Next page](https://boards.straightdope.com/t/taking-a-large-check-from-a-service-member-good-or-bad-idea/834741.md?page=3)