The exact timeline for when a seller will get their money on or after the closing date on a home sale is not concrete. Typically speaking, it can take anywhere from one to five days for the funds to be released and deposited into the seller’s bank account. However, this may vary depending on several factors. Let’s take a look at some things that can affect your payday.
Everything Must Be in Order on Closing Day
For cash sales, the closing process typically takes less time than mortgage-financed transactions – but usually no more than three days. If you are doing a wire transfer, those funds can often be transferred to a bank account same-day or instantly.
However, even if you are dealing with a cash sale, some details still need to be taken care of on closing day before settlement and release of funds can occur. For instance, all documents must be completed and signed by both parties (the buyer and seller) and the mortgage lender involved in the transaction. Closing costs need to be accounted for, any personal property specified in the purchase agreement should be verified as present in the home (which can be accomplished during the final walkthrough right before closing), and the funds in the escrow account need to be accounted for. The closing agent will then need to verify that all was accomplished correctly, and only then can the funds be released.
Everything with the title and mortgage needs to be in order before payment can be made. The closing agent and the mortgage lender will be heavily involved, probably more so than your agent, in handling payments. This is because the lender deals directly with the mortgage terms and funds, and the title company deals with fees associated with the sales transaction and the actual transfer of rights to the property.
Location, Location, Location!
Your location also plays a role in determining how long it takes for a seller to get their money after closing. Some states have laws designed to protect buyers and sellers from fraud requiring certain documents to be filed before funds are dispersed. States like Arizona, California, and New York are known for having particularly strict rules that can take longer than other states regarding releasing funds.
What Are Wet Funding States vs. Dry Funding States?
When talking about the time it takes to get paid after closing on a home sale, you’ll likely hear terms like “wet funding states” and “dry funding states.” Dry funding means that all of the paperwork is signed and ready for the lender to release funds, but the actual transfer of sale proceeds doesn’t happen until after closing day. This can take up to five days because it involves additional processing from both your agent’s office as well as the lending company.
On the other hand, wet funding occurs when funds are released immediately at closing, usually via check or wire transfer, so there is no waiting period before funds are available. There are far more wet-funding states than there are dry-funding states, and Minnesota is a wet-funding state.
Work With a Professional Real Estate Agent
Working with an experienced real estate agent is essential when it comes to getting your money on, or as soon as possible after the closing date. A good real estate agent understands the process involved in collecting funds at settlement and can help ensure the process is completed efficiently and without any snags. Hire a local real estate expert to make the selling process smoother and easier.
Set Your Closing Date and Get Your Money!
All in all, depending on several factors (mainly what state you’re in), the process to get money after closing on a home sale may take a few hours or a few days, or slightly longer. 2022 was a crazy year, and the jury is still out on what the housing market will look like in 2023.
To ensure you get your funds as soon as possible, it’s best to work with experienced real estate agents who know the ins and outs of the process and can help guide you through it quickly and smoothly. A good real estate agent can make all the difference in making the closing process smooth, and they’ll protect your interest before, during, and after the closing date.