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, Tue, 6 Jun 2006 08:36:13
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Cash is always good.
A bank check/cashier's check/teller's check, etc. (different banks can call them different things) is safest for the person receiving the funds.
A bank money order (or any money order) is safer for the person giving the funds.
A certified check is where an individual writes his/her own check out, and the bank certifies the check by overwriting the MICR line at the bottom of the check and placing a special signed stamp on the check thereby making the check a property of the certifying bank.
Problems.
Not many banks certify checks anymore because of the expense in tracking/bookkeeping and because for most purposes a cashier's check serves the same purpose. From the receivers point of view, it guarantees the funds unless there is another 'defect in negotiability' as the bank MUST pay on presentment and demand.
Cashier's checks/teller checks, etc. carry the same absolute obligation of the issuing bank so has the same guarantees for the receiving party.
Contrary to popular belief, you CANNOT place a stop payment on a cashier's or certified check. If you lose the check, you can go to the bank and say you want to place a stop payment on it. Your bank MAY accept what you think is a stop payment; however, no stop payment is really placed on the check.
Lets say the bank says ok to your stop payment. You sign a paper saying the intended party did not receive it and does not have possesion of it. If that check should come in. The bank does NOT return the check as STOP PAYMENT. The check is returned as FORGED ENDORSEMENT based on your affidavit. The Uniform Commercial Code does not allow for stops. As long as the issuing bank is solvent (or bought by another solvent institution as is the case now days), and there are no defects (forged endorsement, etc) the bank MUST pay on that check. That's why it's good for the person receiving the funds. It is an absolute order to pay. That's why some banks will tell you that you have to get an INDEMNNITY BOND which is pretty much going to an insurance company and getting a rider stating the insurance company will pay if the check should show up without defect. But guess what, if you want an indemnity bond for a $10k check, the insurance company is going to want the 10k for the bond plus charges.
A money order is similar to a one-time checking account. It carries the same safe-guards as regular checks. The purchaser can usually place a stop payment on a money order as easily as they can on their own check. That is why it's a better form for the person giving the funds.
If someone places a stop on a check or money order because they didn't like the car, it is actually illegal to place a stop on that check for that reason. If the payor receives the car, he/she has taken delivery and any issues with satisfaction is outside the negotiability of the check. The payee can actually demand payment from the drawee bank based on that fact. The maker of the check/purchaser would then have to negotiate or sue the seller for the funds back based on any representations made about the car. A lot of people do not realize these little glitches, but it's all in the Uniform Commercial Code. In fact many regular bankers are not aware of these little glitches.
The MAIN problem for you as the seller is that even if you request and ask for a certified or cashier's check, you probably don't know what the certified check or cashier's check from the buyer's bank looks like. There are a lot of forged cashier's checks floating around now days (money orders too - especially postal money orders) and it's causing a real problems with commerce and for banks. Sometimes you can call the issuing bank to verify issuance, but not all banks give that info in all cases.
There you go more than you ever want to know about checks in one post. Decided to post all this for anyone wanting to read for their own info on future sales/buys.
posted by 24.128.175...
, Tue, 6 Jun 2006 08:36:13
, Tue, 6 Jun 2006 15:06:00, Tue, 6 Jun 2006 13:29:15, Tue, 6 Jun 2006 08:38:01
, Tue, 6 Jun 2006 10:30:42
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