You worked with your real estate agent, the offer came in and it looks good! Now that you’ve accepted, you’re wondering when you get the money. It’s an important question, when and how does the seller get paid after selling a house? Before that sweet payment hits your bank account, there are several things you’ll need to take care of prior to crossing the closing line. Additionally, the amount of time it takes to get your money depends on numerous factors, including where you live.
You may be wondering when you sell a house where does the money go. Or even more critical, when you sell your house how do you get the money? These are essential questions. Unfortunately, and understandably, these questions can make many sellers a bit nervous, though there’s no reason to fear. Keep reading as this article will cover all of these important questions and more.
- What Needs to Happen Before Closing Day?
- Closing Day: What to Expect as a Seller?
- When Does Seller Get Paid after Selling and after Closing
- Wrapping Up
What Needs to Happen Before Closing Day?
Before reaching that highly anticipated finish line, you’ll need to check several boxes. Keep in mind that this is one area where a good real estate agent will shine. Part of their job is to walk you through the ins and out of the steps after you accept an offer. Among those steps, you’ll find:
1. The Buyer Placing Earnest Money into Escrow
This is where the buyer pays a cash deposit typically around 1% to 3% of the home’s selling price. This ensures they are serious about purchasing the property. This amount is placed into an escrow account, which we’ll explore later in this article.
2. A Search of Property Records
During this time, a search of property records by a title company is performed. This is to make sure the seller owns the property and can legally sell it. They will check the following:
- If you are the sole owner,
- Check for any liens on the property,
- Ensure there are no unpaid taxes,
- Look for any outstanding mortgage amounts,
- and anything else that might come up to prevent the clean sale of the house.
3. Buyer Ordered Home Inspection
It’s important for buyers to know what they are getting. This is why a home inspection is a critical step in the closing process. The buyer or their real estate agent will hire an expert. They will perform a thorough walkthrough of the home and property and prepare a report. This report covers the condition of the home’s most significant components, what requires immediate attention, and what can wait.
The inspection gives your buyer a deep look into the home and property. After the inspection, the buyer’s agent can request any needed repairs. They can also ask for lower closing costs to cover those repairs.
Note: A buyer has the option to waive the home inspection contingency. This is usually only done in a competitive market where they want their offer to stand out. It is risky. Often an inspection can still be done for informational purposes only.
4. Final Walkthrough
The final walkthrough is among the last steps of the pre-closing day process. It takes place after the seller has moved out. It allows the buyer the opportunity to confirm any repairs that you agreed to have taken place.
It’s one last chance for the buyer to see the home they’re purchasing. They ensure it is in the same or better condition as the day they fell in love with it.
Closing Day: What to Expect as a Seller?
Around one to three months after the start of the closing process, you’ll arrive at closing day. The buyer and their agent will be present at this meeting. Your attendance may not be required if your agent prepared all necessary documents and had you sign them ahead of time. Speak with your agent to know for sure.
No matter when you handle your side of closing day, you’ll need a photo ID, keys to the house, and receipts for any repairs to which you agreed.
You’ll sign the closing statement, affidavit of title, bill of sale, the deed, and any other paperwork advised by your agent. Don’t forget to bring your checkbook in case there are any closing costs left to cover. After this, you can focus on when you get paid after selling your house.
How Long after Closing Date Will Seller Receive Money?
You put in the hard work of finding a buyer and navigating the closing process, so it’s only natural to wonder when you’ll see all those zeros hit your bank account. The amount of time depends on a number of factors.
One of these is if you live in a wet or dry funding state. While most states are wet funding states where there is no daylight between closing day and when you’re paid, there are nine dry funding states: Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, Oregon, and Washington.
What Does Wet Funding Mean?
Simply put, wet funding means that the seller is paid right after closing or within 48 hours. So a seller gets paid after selling the house and the closing date. Payments in wet funding states happen so fast because all the paperwork required to complete the loan is verified and approved on the date of closing.
What Does Dry Funding Mean?
Dry funding is where the seller waits as many as four days before receiving payment. Dry closing provides the lender an extra amount of time to check over the closing documents and collect closing costs before releasing the funds. This gap also allows the closing agent more time to take care of any outstanding issues.
If you live in a dry funding state, you may need to consider the delayed payment if you’re purchasing a new property at or around that time. By doing this, you’ll set yourself up to have the required funds on closing day when it’s your turn to be the buyer.
When You Sell a House Where Does the Money Go?
This is where escrow comes back into the picture. After the buyer secures an approved loan, their lender sends the funds to your chosen closing agent. The agent then places the funds in an escrow account, which a third party oversees until the deal is complete.
Escrow accounts serve as protection of the buyer’s good faith deposit, ensuring that the right party eventually receives it according to the sale’s conditions. They also act as a holding place for a homeowner’s funds to cover homeowner’s insurance and property taxes. The former is an account for the home buying process where the latter is in place until the buyer’s loan is eventually paid in full.
How Long Does Escrow Take?
Escrow can take between 30 to 60 days, depending on where you live. For more complex property purchases, you can expect a longer escrow process. For the majority of properties, escrows close in 30 days, with the timeline beginning the day after you accept your buyer’s offer or the buyer accepts your counteroffer. Either way, the escrow length should be agreeable to all parties.
When Does Seller Get Paid after Selling and after Closing
You made it through all the hurdles, and now it’s time to see the money, but how do you get paid after selling a house? Some sellers opt to receive payment through wire transfer, while others go the paper check route. With wire transfers, money is sent to your chosen bank that can take between 24 to 48 hours to process, though more often than not, you’ll see the funds within a single business day.
You could get your hands on a paper check at closing, though you’ll need to deposit it and then wait for it to clear. As we all know, banks love to hold large checks for numerous days, if not longer.
It’s important to note here that wire fraud is rampant these days due to advanced technology that allows hackers to infiltrate email and change its contents. There are other ways that fraud occurs, such as bad actors impersonating title officers and the like over the phone. So it’s crucial to use the utmost caution if you choose a wire transfer.
When Do Realtors Get Paid after Closing?
As your trusted partner and loyal advocate on your home selling journey, it’s not uncommon for your realtor to become a friend. So you may be wondering when does your agent see their slice of the pie? Depending on the market, a realtor gets paid immediately after closing or within a few days. More often than not, the agent that stood by your side and walked you through each step of the process will see their commission on closing day.
As you can see, when it comes to when and how you get paid after selling a house, there are numerous factors to consider. If you live in a wet funding state, you’ll see payment much faster than if you reside in a dry funding state. In this case, you’ll need to factor that in when scheduling the closing date on your new home.
One way to be sure that you get your money for selling your house when and how you want it is to hire a good partner. The best real estate agent will answer any questions you have and go to bat for you. They’ll make sure things go as smoothly as they can. The FastExpert real estate agent directory allows you to filter by traits mentioned in reviews from past clients. Check it out to find the best fit for you!