Payment Options at the Trustee's Sale
Years ago, at the foreclosure auctions in California, it was required that you pay your winning bid either in cash or by Cashier's Check.
Nowadays though, in addition to just cash or Cashier's Check, you can pay your winning bid with almost any negotiable instrument issued by a California depository. That opens up your choices to include payment via Teller's Checks, Official Checks, Money Orders, Traveler's Checks, etc. However, you still can't use any kind of bank draft or letters of credit.
Yet, in spite of the expanded forms of payment allowed at the sales, most pro's stick to paying with real Cashier's Checks…rather than using pretenders like Official Checks or Teller's Checks, etc.
The reason is that payment by Cashier's Check cannot be stopped by a payor once the payor has given it to a payee in payment for something. Yes, there is a provision for stopping payment in instances where a Cashier's Check is proven to be lost or stolen. But credit to the issuing payor will be withheld until sufficient time has passed to ensure it actually was lost or stolen.
The fact that payment by Cashier's Check is tantamount to payment in cash isn't lost on the trustees processing the foreclosure auctions. The surety of payment, via Cashier's Checks, gives them the confidence to issue their Trustee's Deed a lot quicker than with any other form of payment. And that's the reason you should insist on using Cashier's Checks too.
All banks issue Cashier's Checks and some S&L's do too. So with all those choices there's no reason not to use Cashier's Checks. And though a bank might be reluctant to issue a Cashier's Check for an amount less than $10,000, they will if it's going to be deposited to an escrow account.
Most banks will waive their customary charge for issuing Cashier’s Checks if you can show them a business requirement for free checks. So talk directly to your branch manager and explain that your business entails a great deal of bidding at foreclosure auctions--which makes paying for Cashier’s Checks too cost prohibitive. If you get turned down, seek out a bank that wants your business bad enough to give you free Cashier’s Checks.
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