After a successful real estate transaction, one of the final steps is the closing and the exchanging of the properties. This is the last stage when both parties have come to an agreement. The details of the transaction, including the price and the documents, will be finalized and signed at the closing. “Closing day” is the end of the transaction, and it is the final opportunity for both the buyer and the seller to come to an agreement on all the details of the property sale. At this point, all the parties involved get together and ensure that everything is in order, as originally agreed.
There are numerous things that need to be completed at the closing. The biggest is the final payment or the exchange of funds from the buyer to the seller. Depending on the state and the laws of that state, this process will vary. The exact timing and the exchange of funds will vary depending on the laws of the state, and of course, the seller’s preference. In some states, you’ll get your money on the day of the closing. In other states, there is a short waiting period between the closing date and when you’re paid. Let’s take a look at the different scenarios. When does the seller get money after closing on their property?
When is the Seller Paid?
The seller gets paid when the exchange of funds is completed between the buyer and the seller. How long after the closing date will the seller receive money? Well, it depends on where the transaction takes place.
Depending on the laws of the state, there can be a number of different timing scenarios to when the seller gets paid. Since the laws of each state vary, it is important for buyers and sellers to consult a local attorney, home buying company, title company, or Realtor to determine the timing of when the seller receives their funds.
There are multiple ways the exchange of funds can happen. The buyer can pay the seller directly with cash, or the buyer can pay for it through a mortgage broker or bank.
In cases where the buyer works with a lender to secure funding for their mortgage, the lender sends the funds to the closing agent or title company. They will put the funds into an escrow account until the conditions are met to release the funds. Typically, this will include having all of the legal paperwork signed.
What Should Sellers Bring to the Closing Date?
Your closing agent will take care of most paperwork on your behalf. As a result, there is very little you’ll need to bring with you to the closing. Some of the documents you should bring include:
- Government-issued photo ID
- Receipts, photos, and documents related to repairs made after inspections
- House keys and security codes
In some cases, you may need to bring an original document to prove that you are the owner of the property. However, much of the work related to title research and ownership is completed long before closing day.
Your real estate agent or closing agent may request that you bring other documentation specific to your closing. Be sure to remember to print physical copies of any documents requested to expedite the process.
How Long Does the Closing Process Take?
The closing process will vary depending on the location, the buyer, and the seller. The exchange of funds can take place in person or remotely. How long does it take to get money after closing varies based on what paperwork you’ve already signed before closing day.
At closing day, sellers will need to sign the deed, bill of sale, affidavit of title, and settlement statements. As the seller of the house, signing paperwork may only take you 10 to 15 minutes to complete. For buyers, they may need to spend an hour or two signing paperwork.
Generally, it is smart to schedule the closing as early in the day as possible and to avoid Fridays. That way, if something comes up that takes more time, you’ll have enough time booked out in the day to handle it without delaying payment.
What are the Seller’s Responsibilities During a Home Closing?
The seller must sign all the documents related to the transaction, including the purchase agreement. This is done at the closing.
The seller must also sign the legal disclosures at the closing. The legal disclosures are documents that include information about the seller’s rights and obligations.
The seller must also bring an original and valid government-issued ID to the closing. The ID must be government-issued and show the seller’s name, address, and photo. The ID must also be valid. It is important to follow the laws of the state to determine the exact requirements for an ID to be valid.
When Will Funds Officially Disperse Into the Seller’s Bank Account?
When the exchange of funds is complete, funds will go into the seller’s bank account. It is possible for the exchange of funds to take place quickly and smoothly at the closing.
This can take place within 24 hours of closing, or within a 7 day period. It depends on the method of payment, where you live, and other factors.
When Does the Seller Receive Money From the Buyer?
At closing, the process of transferring money from the buyer to the seller begins. As the sale of the property is settled, the parties that require payment from the buyer are paid. This includes closing costs, commissions to real estate agents, and other fees. You will receive a settlement statement that details where the funds are distributed.
If you have an existing mortgage that you owe money for the property, the closing agent or title company will distribute the funds owed on the mortgage first before issuing your payment. This is most often completed during the closing period and should not require any additional holds for sellers to access their money.
Do You Get a Check at Closing?
You can opt to get a check at closing or to receive a wire transfer. A wire is a process that enables the bank to wire your money directly to your account. As long as it isn’t the weekend or a bank holiday, you should get the funds immediately. This means that you can access your money in the fastest way possible.
Banks often put a hold on large checks to make sure that they will clear before releasing the money into your account. This process can take up to 7 days. Many mortgage brokers will recommend clients ask for a check at closing to avoid the potential of wire fraud. However, how you choose to get paid is ultimately up to you.
When Do Real Estate Agents Get Paid After Closing?
When do Realtors get paid after closing? Much like when the seller gets paid, the real estate agent often gets paid within a short time frame after closing. If they are an independent real estate agent living in a wet funding state, they could be paid within 24 hours.
Real estate agents that work as part of brokerages or partnerships first have to wait for the brokerage to be paid before their commission is paid to them. This could take two or three weeks.
Some states have mandatory delays in distributing funds from real estate closings. In these cases, the real estate agent’s commissions will also be delayed.
If you sell a house without a Realtor, you won’t have to pay them a commission for their services.
Wet vs. Dry Closings
A primary factor in answering the question “How long after closing do you get your money?” comes down to whether you live in a wet or a dry funding state.
If you live in a wet funding state, you will be paid on the day of the closing. Fortunately, this applies to most homeowners in the United States. In a dry funding state, the loan closes once the mortgage lender has time to complete the paperwork.
Most states are wet funding states, where all funding and required paperwork are completed in a single day. However, the following states are dry funding states:
- New Mexico