In Brief

• Checks Made to Sellers: In creative finance or subto deals, you may receive refund checks made out to the seller even though the funds belong to you.
• Best Option – Reissue: Request the check be reissued in your name using formats like “C/O” or “FBO” to ensure you can deposit it.
• Other Options: If reissue isn’t possible, get the seller to assign the check to you or use a Power of Attorney—though banks may reject POA without prior approva

Sometimes in subject-to or creative finance deals, you receive a check made out to the original seller, but the funds are actually yours. For example, insurance refunds or escrow overage checks might arrive in their name. Here are practical ways to handle this situation.

Problem

The check is made out to someone else (such as your seller) instead of you or your company. Even if you have a Power of Attorney (POA) or an Assignment of Insurance Proceeds, banks and issuers often have strict policies preventing you from depositing it directly.

Option 1 – Ask for the check to be reissued

This is usually the cleanest method.

How to do it:

Contact the insurance, escrow, or mortgage company and request they reissue the check payable to you or your company. Often, they require the name on the check to match the policy or account holder. Here are two ways to structure the payee name:

[Seller Name], C/O [Your Company] (Care Of)
[Your Company], FBO [Seller Name] (For Benefit Of)

For example:

Matthew Coles, C/O HomeBuyers LLC
HomeBuyers LLC, FBO Brandon Marsh

This keeps the seller’s name on the check while allowing you to deposit it.

Option 2 – Have the seller assign the check to you

If reissuing is not possible, ask the seller to endorse and assign the check to you. They sign the back, write “Pay to the order of [Your Company],” and then you sign as well.

Example endorsement:

Matthew Coles
Pay to the order of HomeBuyers LLC
Brandon Marsh, Manager of HomeBuyers LLC

This effectively transfers ownership of the check to your company so you can deposit it.

Option 3 – Use your Power of Attorney to sign

If you hold a valid POA, you can sign on their behalf. However, many banks reject these deposits unless they have the POA on file. Additionally, if it is rejected after endorsing, you cannot correct it and will need a new check issued.

Example:

Brandon Marsh as POA for Matthew Coles
Pay to the order of HomeBuyers LLC
Brandon Marsh, Manager of HomeBuyers LLC

Final Tips

Always check with your bank first on how they want the endorsement formatted. If reissue or assignment fails, depositing with POA is a last resort. For insurance or escrow checks, contact the issuer for reissue instructions before endorsing.

This process works for insurance refunds, escrow overages, mortgage refunds, or any check made out to your seller that is rightfully yours.