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 my home sale?
Ultimately, the time it takes to get those funds into your account will depend on a few different 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.
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 comments.
Steps of this process can include:
- Home inspection
- Pest inspection
- Kicking off title review
- Reviewing CC&R’s (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.
How to make closing day come even faster
If you want to get your money as fast as possible, it’s important that your sale goes smoothly. That means working with a top real estate agent who knows the industry inside and out. These agents can handle vetting buyers, scheduling showings, and negotiating for you to ensure you’re getting your money as quickly as possible.
They’ll also stay on top of all aspects of the settlement and closing for you so you don’t have to. Overman explains that agents often stay on top of the real estate attorney and buying agent to ensure everything is going according to plan.
What to know about closing day
Despite the name “closing day,” Overman explains that when you sit down with your real estate agent, your closing agent, and perhaps the buyer and their agent, you’re actually at settlement. But settlement usually happens the same day as closing, when the deed or title gets recorded with the county.
Depending on what state you live in, you might sign the paperwork at the same time as the buyers or separately. Be sure to ask your real estate agent what’s expected of you.
At settlement, you’ll need to sign:
- The deed
- The bill of the sale
- Affidavit of title
- Settlement or closing statements
Your closing agent will bring most of the paperwork that you need to sign. But you should be sure to bring the following to closing:
- Your photo ID
- Receipts of repairs made after the inspection
- Keys and codes for doors
- Any other paperwork your real estate agent tells you to bring
And remember, you’ll want to sign before your bank’s cut-off time, especially if you’re signing on a Friday. Overman and Smith recommend signing on a Thursday or earlier when possible.
Of course, you won’t get the entire sale price as your proceeds. You can use HomeLight’s Net Proceeds Calculator to determine how much money you might see at closing.
You’ll have to pay off your remaining mortgage, pay the real estate agent commission, and take care of other closing costs.
Your settlement statement will outline your final take-home amount, so you’ll have everything laid out in clear black-and-white.
When does the seller get paid after closing?
How long closing takes can vary depending on a few different 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, says Overman.
“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 shares, “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:
- New Mexico
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.
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 AgentCloseShaunna Overman Real Estate Agent at The Overman Group, Inc.
- Years of Experience 9
- Transactions 776
- Average Price Point $169k
- Single Family Homes 702
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,” she said. “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.”
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.
The National Association of Realtors reported that in 2020, the average For Sale By Owner (FSBO) home sold for $260,000, compared to $318,000 for agent-assisted homes. That’s a 22% difference!
While FSBO sellers might save money on their agent commission, they often fail to get the most money for their home sale by failing to price accurately and failing to market properly. Agents can help price a home, negotiate with buyers, and market your homes 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.”
To find a top real estate agent in your area, use HomeLight’s Agent Match Tool. The top 5% of real estate agents can help secure up to 10% more for your home than an average real estate agent, according to HomeLight’s findings.
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