Card Rejection

[bwbuddy5]

Just got a call from an upset friend, he was going to buy a resale but since the resale company required a personal check for the deposit, and he could only use a card, they cancelled the purchase. Apparently, he had some kind of funky home equity credit line he was going to use, and the card his lender requires him to use is the only option.

Is using a "check only" some kind of legal requirement, or does that sound peculiar to this specific resale company?

 

[com_op_2000]

Have your friend, deposit the amount from this HELOC into his personal checking account, then cut a check from that account.

 

[mcorbo]

Not peculiar, when a company accepts credit/debit cards of any type, they typically lose 2-3% of the transaction amount as processing fees to the bank that holds the card. One reason why car dealer do not like to take credit cards.

 

[bwbuddy5]

Have your friend, deposit the amount from this HELOC into his personal checking account, then cut a check from that account.

Yeah, I had suggested the same thing, as did the resale company apparently, but he's got some kind of funding source where his fees and interest rate are much higher if he doesn't use the card in a straight transaction.

Perhaps at this point, the resale company did him a favor.

 

[bwbuddy5]

Not peculiar, when a company accepts credit/debit cards of any type, they typically lose 2-3% of the transaction amount as processing fees to the bank that holds the card. One reason why car dealer do not like to take credit cards.

Makes sense, but isn't some commission better than no commission? And, doesn't that undercut the seller for the sake of the resale company's commission?

 

[supersnoop]

Some brokers will accept a credit card for the deposit, but everyone requires a cashiers check for closing. Well, I guess Disney will let you buy the whole thing with a credit card, but then you're paying direct prices.

 

[crisi]

Makes sense, but isn't some commission better than no commission? And, doesn't that undercut the seller for the sake of the resale company's commission?

They'll get full commission from the next buyer in very likely less than a week.

 

[KAT4DISNEY]

Yeah, I had suggested the same thing, as did the resale company apparently, but he's got some kind of funding source where his fees and interest rate are much higher if he doesn't use the card in a straight transaction.

Perhaps at this point, the resale company did him a favor.

I think far more peculiar than a company not accepting a credit card on a resale purchase is this whole required to pay with a card for the HELOC. And perhaps as you say the resale company did him a favor in the end.

 

[LisaS]

Makes sense, but isn't some commission better than no commission? And, doesn't that undercut the seller for the sake of the resale company's commission?

The standard resale broker commission is 10% so at 2%-3% in credit card fees, the broker would be losing 20%-30% of their commission to those fees. There have been some reports here of some brokers charging only a 7% commission so in that case the broker could lose up to 43% of their already reduced commission to CC fees.

As crisi said, if they lose this buyer due to his/her inability to pay by check, another buyer will come along soon who can pay by check and then the broker gets their full commission.