When Does the Seller Get Paid After Closing?

If your home is currently on the market, you may be wondering, “When does the seller get paid after closing?” A few things can affect how quickly you get paid, including what state you live in, how you choose to receive funds, and more. 

What Are the Necessary Steps Before “Payday”? 

There is more to the payment process than a buyer agreeing to purchase your home.  

Several things must be completed before you can receive payment, including: 

  • Title Review 
  • Home Inspection 
  • Pest inspection (if applicable) 
  • Home Appraisal 
  • Negotiations 
  • Final Walkthrough 
  • Signing Documents 
  • Paying Necessary Debt

It is crucial to have knowledgeable professionals on your side during this process, including a reputable real estate attorney. These professionals will be able to guide you through each step, ensuring a smoother process and quicker payment 

Why Isn’t the Payment Released Immediately? 

Typically, sellers do not collect any money at the closing table. Before receiving the proceeds from your sale, the overseer of your escrow account must make several other payments first. They will pay the title company, real estate brokers, and attorneys before you receive your payment.  

Your remaining mortgage balance must also be paid, as well as closing costs, if applicable. Your portion of the funds will be released to you after these parties are paid.  

How Long Does It Take to Get Paid After Closing?

Here’s the million-dollar question: When does the seller get paid after closing? Generally speaking, you will receive your payment anywhere from a few hours to a few days after closing.  

Funds are usually released after all documents are signed and the deed is recorded. If you live in a “wet funding” state, you could receive your payment this same day. 

At this point, you may be wondering what a wet funding (or wet closing) state is. Here is the difference between wet and dry funding states: 

  • Wet Funding State – Mortgage lenders release funds right after closing; therefore, the ink is still “wet” on the documents. Because they release the money on the same day, you will not have to wait long to receive payment. 
  • Dry Funding State – Mortgage lenders are given extra time to look over documents, so funds are not always available immediately. Hence, the ink had time to “dry” on the papers. You can expect a delay of around 3-4 days. Dry funding states are Washington, Oregon, New Mexico, Nevada, Idaho, Hawaii, California, Arizona, and Alaska. 

Assuming you live in a wet funding state such as Massachusetts, your funds will probably be available within a few hours to 1-2 business days. It is important to note that the exact timing may depend on your real estate attorney and how you choose to receive your money. 

What Are the Ways I Can Receive Payment After Closing? 

There are two ways sellers can receive their funds after closing. The most popular way is through wire transfer. This method electronically transfers money from the escrow account to your bank account, money market, or stock account. A wire transfer is the quickest option, as most banks clear the funds within 24-48 hours. 

The second way you may receive proceeds from the sale of your home is via paper check. Some sellers prefer this method to avoid any chance of wire fraud. Your check may be ready to be picked up on the closing day, but it will take additional time to clear the bank – up to 7 business days. You can also have your check mailed if you are not available to pick it up. 

Before writing checks or making withdrawals, check your bank account to ensure that the funds have cleared.

What Can Cause Payment Holdups?

Most sellers do not experience payment holdups, but it can happen. Sometimes, the attorneys or mortgage lenders may hold your funds in escrow until certain conditions are met.  

Here is an example: During negotiations, the seller agrees to pay for a new roof using proceeds from the home sale. Funds will not be paid for this upgrade until after the work has been satisfactorily completed. Because they must wait for the repairs to be finished, they cannot release any funds to you. You will not receive your portion of the payment until after the contractor has been paid. 

Is There Anything I Can Do to Speed Up the Process? 

While you may be unable to speed up the process between closing and when you receive payment, there are a few things you can do that may help you get to the closing table faster. 

Keep in touch with your real estate attorney, broker, and other professionals helping you, and follow their directions. Write all deadlines on your calendar and sign any required paperwork as quickly as possible. Doing these small things can sometimes make a big difference. 

If you need a skilled real estate attorney who offers personalized service, I can help! Check out more resources on my website – enjoy informative blogs, a video library, and free downloads. Please feel free to reach out to me with any questions.