According to Realtor.com, most homes for sale in the USA take 31 days to sell. That is still a fast turnaround time if you need to sell your home quickly, but what you want to know is, ”When does the seller get money after closing?”
If you need cash due to a divorce, excessive holding costs on an inherited home, or pending foreclosure, you need answers to the question, ”how long after closing will I get my money?”, fast.
Keep reading to find out what you need to know about this question and more.
When Does the Seller Get Money After Closing in the USA?
Across the nation, sellers typically receive their money after they complete the closing process. Where you live can affect how long the seller will wait after the closing date to receive their money.
In most states, called wet funding states, you receive your money within 24 hours of closing. In dry funding states, you’ll wait a little longer.
When Does the Seller Get Paid After Closing in a Dry or Wet Funding State?
In dry funding states, the parties gather on closing day to sign the relevant documents, but they don’t have to complete all the paperwork at that time.
As a result, the seller doesn’t receive any mortgage funds on that day, as the sale doesn’t close until all the paperwork is complete, and the lender sends the money to the closing agent. This can take up to four days.
Washington, Oregon, New Mexico, Nevada, Idaho, Arizona, Alaska, Hawaii, and California are dry funding states.
All the other states are wet funding states with much stricter requirements for closing.
In these states, the parties must complete and finalize every aspect of the mortgage before closing. In most cases, the seller receives their money within two days of closing.
Factors Impacting the Home Closing Timeline
Closing is a type of ‘settlement’ since you need to settle up with everyone involved in the sale of your home before getting paid after closing. This process impacts how long it takes to finalize closing and when you’ll get your money.
These are some steps and payments involved in closing on a home sale:
- Reviewing and clearing the title
- Undertaking a home inspection
- Negotiating repairs and credit
- Get a home appraisal
- Renegotiating the sale price
- Pay leftover debt from your mortgage
- A final walkthrough
- Signing all relevant documents
According to this report from Ellie Mae, this process can take up to 52 days, depending on the type of mortgage involved. These are the average timelines for the most common types of loans:
- Standard mortgages – 47 days
- VA loans – 51 days
- FHA loans – 52 days
Working with a real estate agent or a property lawyer can help speed this process along. When a home sells, a closing agent receives the money.
They place it into an escrow account and handle all the necessary payments from this account.
Before they disburse this money, they must review all the documentation to ensure both parties have met the agreed-upon requirements. As soon as the lender and the closing agent have cleared these aspects, they can begin paying the closing costs.
Often, this occurs at the closing table, unless the closing agent has questions or concerns.
Once they’ve paid for everything, you can choose from one of two options for receiving your money, i.e. check or wire transfer. Each of these can impact how long it takes to receive your money.
How Long After Closing Does the Seller Get Money? Transfer vs. Check
The payment method impacts how long it takes for the money to reach your bank after the distributor releases it. This is what to expect:How Long Do Check Payments Take?
When you choose a check payment, you need to deposit it at the bank, and it can take up to seven business days for the money to clear in your account.
If you ask for a check, you can opt to pick it up or have it delivered. In some cases, the escrow holder may allow your real estate broker to deliver your check in person.
You must provide the escrow holder with your forwarding address if you want them to deliver your check via mail or overnight delivery.
If your closing occurs early in the day, the escrow company may have it ready on the same day. The relevant financial institutions may provide you with details on how long you can expect the payment to take.
Check payments are becoming increasingly rare, so banks have many procedures they need to finalize before they release the cash. These are to protect the buyer and seller from fraudulent activities. When Does the Seller Get Paid After Closing via Wire Transfer?
With a wire transfer, you can get your money within 24 to 48 hours. You must first provide written wire instructions to your bank before embarking on this process. Your bank can help you complete this process.
Alternatively, escrow holders can wire funds to your stock or money market accounts. They will usually do so within two days of closing, but your bank will take an extra day to process the transaction.
Although wire transfers aren’t devoid of fraud, there are fewer procedural checks involved in the process, so they take place a lot quicker.
Which Factors Can Delay the Seller’s Payment?
Your escrow holder may stall paying over your money until you meet certain conditions.
Once the buyer and seller have agreed on who will pay for any necessary home repairs, they must instruct the escrow holder to pay for these out of the escrow funds accordingly.
In most cases, this only occurs with things that can impact the buyer’s decision, like roofs, septic tanks, and other major repairs.
The escrow holder only disburses these funds once both parties are happy with the completed work. In this way, delays on the part of the contractors involved can affect how soon the seller gets their money.
What To Expect on Closing Day?
The closing process usually takes four to six weeks, and usually depends on how quickly the buyer can accumulate the necessary funds. Issues with the home or title can also delay the process.
If you’re taking advantage of a cash offer on your home, or the buyer is paying with a hard money loan, you’ll save time waiting for mortgage approval.
When you finally reach your closing date, you’ll meet your real estate agent and a closing agent. A closing agent is a third party who oversees the sale.
The seller needs to bring a valid government-issued photo ID as well as all the keys, garage door openers, and access codes required for the house.
The buyer also needs to bring a cashier’s check to pay any costs that aren’t paid out of the sale proceeds. These may include additional closing costs and seller’s credits.
The closing agent usually provides this information after reviewing the documentation provided by the seller and asking any pertinent questions.
During the closing process, the seller needs to sign the following documents:
Seller’s Closing Disclosure
This is an itemized list featuring the closing costs, final mortgage payment owed, and the sale price. It shows how much you’ll receive from the proceeds of the sale.
Affidavit of Title
This legal document proves that the seller is the rightful owner of the property. It also discloses any legal issues concerning the seller or the property.
Deed and Bill of Sale
The deed is another legal document that transfers ownership of the property to the buyer. The Bill of Sale lists any personal property the buyer intends to leave behind, i.e., appliances and furniture.
Your lender will provide you with this paperwork. It details the amount of your final mortgage payment as well as any prepayment penalties.
Finally, you’ll sign a disclosure acknowledging that you’re aware of the costs involved in the sale of your home and the payment you’ll receive. The closing agent prepares this document in line with the information provided above.
When Does a Cash Buyer Give the Seller Money?
Now that you understand everything surrounding your question, “When does the seller get money after closing?”, it’s easy to see that you might not get the cash you need as fast as you need it.
Have you asked, “When does the seller get paid after selling to a cash investor?”. With iBuyer, you can look forward to a fast, flexible closing time that suits you.
We can provide an instant valuation on your home and connect you with committed and qualified buyers as soon as possible. Enter your address now, and find out how much you could get for your home fast.