So, you’ve accepted an offer on your home sale. Maybe you’ve made it through the settlement and you’re still awaiting closing day, or perhaps you’re still negotiating with your buyer. Either way, you probably have one very important question on your mind: When does a seller get paid after closing on a home sale?
Ultimately, the time it takes to get those funds into your account will depend on a few factors. These can include where you live, whether it’s a cash or mortgage-financed sale, and whether you’re working with a top real estate agent.
But luckily, there are some things you can do to ensure closing day comes quickly, and that you end up with the biggest check possible. We spoke with Deborah Smith, a top real estate agent in Detroit, and Shaunna Overman, a top real estate agent in North Carolina, to get the details.
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Steps to clear before settlement
You’ll have to go through several steps before you sign those papers. Luckily, a real estate agent can help you every step of the way. Before the settlement — when you start signing documents — you’ll have to get through what’s called an “inspection period” or “due diligence period,” depending on where you live.
“During that time the buyers are doing any investigation of the property that they would like to do in order to make a decision on whether or not they’re actually moving forward with the purchase of the home,” Overman says.
Steps of this process can include:
- Home inspection
- Pest inspection
- Negotiation
- Kicking off title review
- (if home is in HOA community)
During this due diligence stage, the buyer and seller can continue to negotiate any terms of the sale, such as fixing anything that comes up in the inspection or offering a concession.
“From that point when that inspection period ends, most times the seller is going to make it to the settlement table,” Overman explains.
When does the seller get paid after closing?
How long closing takes can vary depending on a few factors. Generally speaking, you can receive your home sale proceeds on the same day that you close — meaning you and the buyer have settled, signed all the correct documents, and your deed or title has been recorded by your county of residence.
There is usually a gap between the documents being signed and the deed or title being recorded, and another gap between the deed being recorded and funds being released, Overman says.
“From the time that the seller signs the paperwork until the time the deed or the title — depending on the state — is recorded, there’s a lot of gray area,” Overman says, “because the seller’s already signed away their rights, but it’s not officially recorded yet.”
As long as all your documents are filed before your bank’s cut-off time — when they stop receiving new requests for the day — you should be able to get your funds within a few hours. This is true for the vast majority of states, called “wet states,” a reference to the ink still being wet on the page when you receive your funds.
However, nine states allow “dry closings,” where a gap can exist between signing the paperwork and payment being initiated. In dry states, after you sign all the documents, it can take a few days to receive the funds.
The dry funding states are:
- Alaska
- Arizona
- California
- Hawaii
- Idaho
- Nevada
- New Mexico
- Oregon
- Washington
If you live in one of these states, you should check with your real estate professional and closing agent to get an estimate on when you might get your money. But typically, it should be within four days.
Should I get a wire transfer or a check?
Additionally, the way you receive your funds can affect how fast you get them. Some sellers choose to receive their funds through a wire transfer, while others prefer to receive a paper check.
A wire transfer can take between 24 to 48 hours to process but is usually available in your account within one business day. Meanwhile, a paper check could be available right at the time of closing but will need to be deposited and cleared, and a bank can often hold that deposit for up to seven days. Both Smith and Overman recommend their clients use old-fashioned checks for security’s sake. Overman knows of a local agent who recently lost a client’s funds through a wire fraud case.
Wire fraud has become a tremendous issue all across the world because of technology and how easy it is for skilled hackers to intercept and manipulate emails. And they even make phone calls to folks claiming that they’re from the title office or the attorney’s office and that they’re in need of their banking information.
Shaunna Overman Real Estate Agent
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Shaunna Overman Real Estate Agent at The Overman Group, Inc.
5.0
- Years of Experience 11
- Transactions 1126
- Average Price Point $201k
- Single Family Homes 1037
Overman encourages clients who do choose to get a wire transfer to be careful when giving banking information over the phone or Internet, and ensure the person they’re talking to is really who they say they are.
How to get paid as much as possible
In addition to getting your money as quickly as possible, you of course want to get as much money as possible from your home sale. The easiest way to ensure you’re getting the most value for your house is by working with a top real estate agent. An agent can help price your home right, negotiate with buyers, and market your home so that it gets the most eyes on it possible.
“Much like if there is a sale at a national store: They can’t get folks in if that marketing never goes out to let those people know that those items are on sale,” Overman explains. “And real estate works the same way. This is just a much larger product that we’re working with.”
HomeLight can help connect you with an experienced real estate agent in your area based on your selling situation. According to our findings, the top 5% of real estate agents can help secure up to 10% more for your home than an average real estate agent.
Header Image Source: (Andrey_Popov / Shutterstock)
