When Does the Seller Get Money After Closing?

✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

The closing process in a real estate transaction typically takes around 30 to 45 days. Moreover, the seller only gets money after 1 to 4 days of closing the deal. This payment period can vary, as it largely depends on your state’s regulations.

Whether you live in a dry or wet funding state impacts the payment timeline. Similarly, the mode of fund transfer also plays a role. This blog explores ways for a seller to get money faster after closing.

Closing Process for Sellers Explained

Once you accept an offer, you must complete the closing process before you get paid. It includes steps like:

1. Negotiation (1 to 3 Days)

After the initial offer, both parties negotiate favorable terms. It may include price, closing date, terms of contract, and other contingencies. Negotiations usually last not more than 3 days.

2. Due Diligence Period (8 to 21 Days)

During this period, both parties must complete various formalities. This includes tasks like home inspection and mortgage approval for buyers. The sellers must make any repairs the buyer requests after the inspection.

3. Wait for the Buyer to Arrange Funds (30 to 60 days)

Now, buyers with mortgages need to get their final loan approval so the lender can sanction their funds on the closing date. It can take lenders around 30 to 60 days to review their application and approve the loan.

If the buyer needs a mortgage, the escrow period can last over 45 days. However, in an all-cash purchase, there’s no lender involved. So, both parties can complete their respective due diligence and close the deal within two weeks.

4. Creation of an Escrow Account (5 to 7 Days)

Once you and the buyer have negotiated the terms of the deal, the escrow period begins. The buyer keeps his earnest money in an escrow account. An escrow or title company manages this account until the closing date arrives.

Documentation for Closing Process

After the escrow period ends, you can finally close the deal. Make sure to bring the following with you on the closing date:

• Photo ID
• Receipts of all repairs
• Access codes and keys to all the entrances
• A checkbook to pay for any pending closing costs
• Home inspection report
• Closing statement
• Deed

The lender will review all the documents and transfer the buyer’s loan amount to the title company. Then, the company will oversee the transfer of ownership and disbursement of funds at closing per your state’s regulations.

Wet Funding vs. Dry Funding

The title company usually holds the funds till it reviews the paperwork. How long a title company can hold funds after closing depends on whether you live in a wet or dry funding state.

What Is Wet Funding?

More than 40 states have mandated wet funding for real estate transactions. In wet funding states, all formalities, including payment, must be completed simultaneously on the closing date.

As a result, title companies verify documents and release funds within 24 hours. This is perfect for those who plan to use the proceeds from the sale immediately.

What Is Dry Funding?

Dry funding, on the other hand, is legal in nine states on the West Coast. In these states, you must wait 2 to 4 days for the title company to release funds.

It gives lenders time to finance the purchase and collect closing costs. Similarly, the title company can also verify paperwork properly before releasing your payment. Here is the complete list of dry funding states.

Alaska	Hawaii	New Mexico
Arizona	Idaho	Oregon
California	Nevada	Washington

Dry funding states, like California and Alaska, also allow wet funding. So, if you live in either of these states, make sure to evaluate which option benefits you the most.

When Does the Seller Get Money After Closing?

The title company’s fund disbursal method can also affect the payment timeline. In both wet and dry funding states, you can request the title company to pay you via a wire transfer or a cashier’s check.

• Cashier’s Check: If you opt for this payment mode, the title company will hand you a check on the closing date. You must deposit it and wait for your bank to clear it, which can take up to 7 days.
• Wire Transfer: Wire transfer, on the other hand, only requires the title company to wire the fund to your bank account. You can expect to receive the entire amount within 24 hours of closing.

Wet funding states already have a swift fund disbursal process. If you are in a dry funding state, wire transfers can speed up the process significantly.

How to Get Paid Faster After Closing?

Here are some more ways for you to get paid faster after closing on the house.

1. Close Early in the Week

Banks and title companies remain closed on weekends. Also, they can’t process all the fund transfer requests in a day. If you close on your house on a Friday, they will probably process your funds the next Monday.

So, when you accept an offer, negotiate a closing date between Monday to Thursday. It allows institutions to process the payment within the same week. With a wire transfer, this strategy can get you funds on the closing date itself.

2. Verify Buyer’s Mortgage Pre-approval

Mortgage-related issues delay almost 25% of real estate transactions. To avoid such hiccups, only accept offers from buyers who have a mortgage pre-approval.

Lenders pre-approve loans based on the applicant’s credit score, income, debts, and assets. It guarantees the buyer that the lender will sanction their loan amount on the closing date.

🎯Average Timelines for Mortgage Approval: Standard mortgages – 47 days. VA loans – 51 days. FHA loans – 52 days.

3. Prioritize All-cash Offers

All-cash bids from buyers remove the lender from the closing process. The buyer directly makes payment to the escrow account through a wire transfer. They are perfect if you are in dry funding states.

There are many iBuyer services or cash-buying companies that extend instant cash offers on houses. However, they usually undercut the sellers by paying them below the property’s FMV.

If you plan to sell for cash, Houzeo is a much better option. Houzeo lists your house on an MLS, bringing you not one but multiple offers from cash buyers. This empowers you to sell your house at a much higher price.

Bottom Line

Depending on your state’s funding regulations, you can receive proceeds from the property sale within 1 day to 4 days. But you can reduce the payment processing time significantly if you choose a wire transfer or go for an all-cash sale.

If you plan to sell your house quickly, turn to Houzeo, a leading cash buyer marketplace in the country. Houzeo gets you an MLS listing within 24 hours and brings you the best offers from both national and local cash buyers.

For the best offers and a quick sale, list with Houzeo today!

» Houzeo Reviews: Check out why more than 7,000+ home sellers have rated Houzeo 4.9 stars out of 5 on Google Reviews and Trustpilot.

 

Frequently Asked Questions

• Seller