Check Writing 101 (Listen up, Millennials!)

January 23, 2018

Are you someone who has figured out that renting in the Charlotte market right now is much more expensive than buying? If you are thinking about pulling the trigger and buying a house in 2018 there is one thing you need to check off your list now… and that is knowing how to write a check.  

In this digital age, people mostly pay for things by swiping a card and many may be unfamiliar with the age-old process of check writing. Listen up! Anytime you make an offer to buy a home, you are going to need an earnest money deposit in the form of a check. This shows the seller you are a committed buyer. If your offer is accepted, that check/money goes towards your down payment. If your offer is not accepted, you should get most of that money back depending on the terms of the purchase agreement. Without that check, your chances of having an offer accepted are slim to none and you should be suspicious of anyone who tells you differently.

How do you go about getting checks? Let me help you here:

Step #1 – Get a checking account.  
If you don’t have a checking account already, go to the nearest bank and open one.  If you do have one, head to your junk drawer and dig out that dusty checkbook from under the batteries and glue sticks. Maybe it’s filled with the starter checks you received when you opened your account or maybe you were a little more creative and ordered custom checks online with palm trees or cute kittens – no matter. It’s not what you have, it’s what you are going to do with it that counts.

Step #2 – How to write a check.
This is also called, “Check Writing 101”. Start by filling the date in the top right corner beneath the check number.  Th next item that needs to be filled out is a little more complicated, but your realtor will give you the name of the company to fill in on the “Pay to the Order of” line and the dollar amount to enter in the box. As a rule, you can expect to pay 1-2% of the total price of the home in earnest money. Using your best penmanship, spell out the dollar amount followed by “and” and the percentage of cents over 100 on the following line. It is a good idea to write “EDM” and the address of the house for tracking purposes on the “For” line.  And the icing on the cake… your signature on the bottom right line. If you don’t know how to sign your John Hancock in cursive, do yourself a favor by getting a whiteboard and dry erase marker and start practicing today.

Step #3 – What next?
This may be obvious, but just in case, that check will be cashed. So, before you write it, make sure you have the money in your account to cover it. Whether you need to curb your spending now or reach out to Mom and Dad to help you start building that nest egg, it’s never too early to start saving. For many, this may be the only check you ever write, but it is an important one! If you understand the process and what to do, you will make your life (and the process of buying a home) much easier.