Escrow services seem to typically require earnest money funds to be deposited via wire transfer. These days the wire transfer instructions will be surrounded by 50-point bold red text warning you that wire fraud is on the rise and you must be extra careful to follow the original wire transfer instructions exactly, call the escrow service to verify the account details, and ignore any phone calls, emails, or text messages you receive with "new" wire transfer instructions.
On the other hand, if the sale doesn't work out, the escrow service will refund your deposit with a check.
I understand why wire transfers are prone to fraud. What I'm less clear on is why they're still the standard for escrow deposits.
I have some guesses about why escrow services might reject other payment methods, but I'm not sure if they're sound:
- Checks can bounce (or in some cases be reversed)
- ACH transfer limits from most banks aren't enough to accommodate the deposit sizes in hot modern markets
- Nobody wants to put a big deposit on their credit card, even if they have a big enough credit limit (plus it might tank your credit rating and affect the mortgage approval process)
Does that about cover it, or are there nuances or other explanations I haven't thought of?