Selling your home is akin to cashing in on your largest investment. If you’ve paid off your mortgage or built-up a significant amount of home equity, you might be eagerly awaiting that large deposit into your bank account. However, you may want to temper your expectations until after the closing date. Real estate transactions are fairly complicated, and there are many moving parts. Therefore, you most likely won’t receive any funds until after loan documents are executed, which typically takes place on or shortly after the closing date. Here is what to expect:

You May Receive An Earnest Deposit
Most offers include an earnest money deposit, which is money provided by the buyer as a sign of good faith and a signal they’re committed to following through on the home sale if all contingencies are satisfied. However, the earnest deposit is typically not made available to you until after the closing date, so you won’t be able to spend it or deposit it into your account. Rather, it’s held in an escrow account and may be returned to the buyer under certain conditions.

The earnest deposit varies depending on the offer but is usually 1% to 5% of the sale price. Once you accept the offer and receive earnest money, you are expected to take the property off of the market and the closing process will begin.

You Can Expect To Receive Payment Around The Closing Date
Real estate transactions typically take 50 to 60 days to finalize, so you’ll likely have a waiting period before you receive your funds. The exact date you receive your money actually can vary depending on where you live. Laws and regulations that apply to mortgage closings can vary by state. There are generally two different types of closings:

• Dry Funding Closings: All paperwork is completed and executed on the closing date, but the documents required to close the loan don’t have to be completed at this time. Consequently, mortgage funds aren’t immediately disbursed until a few days later. A dry closing purposely slows down the closing process to help eliminate funding issues. Dry funding closings are only available in certain states.
• Wet Funding Closings: Unlike dry closings, wet funding closings require loan documents are executed on the closing date. Therefore, funds are disbursed to the seller with 1-2 days after the closing date. Most states require wet funding closings.

In either scenario, payment is usually made through a wire transfer into a bank account (usually the faster option) or as a cashier’s check.

Selling your home can be an emotional process, and many of us are eager to see the cash return. Just be patient and work with your agent throughout the closing process, and you’ll be paid before you know it.

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