Once you decide to sell your home, you’ll undoubtedly have many questions about what you can expect moving forward. The fact is, deciding to sell is just the beginning. At The Legacy Group Real Estate, we know this task involves a lot of planning and work: staging your home, packing, finding a new home, arranging logistics, and so on. Our agents aim to make the selling side of the process as smooth and painless as possible while ensuring you get the best price for your home.
Selling a home is a significant financial transaction. One of the questions you may be asking yourself is: How long will it take to receive the money from my home’s sale?
If you have ever bought or sold a car, you realize that a lot of paperwork is involved before the deal can go through. Naturally, a house sale is even more complicated and involved. But once you understand all the steps involved in a house sale, you can get a clearer idea of when you can expect to see the proceeds from your sale.
Some Preliminary Considerations
The short answer to the question, “When will I see the proceeds from my house sale?” is after the sale closes. But how do you get to that point?
One consideration is whether you live in a “wet funding” state or a “dry funding state.” At the Legacy Group, we handle house sales in Washington, Idaho, and Montana. Washington and Idaho are “dry funding” states, while Montana is a “wet funding” state.
Without getting into detail about the whys and wherefores, in a wet-funding state, a seller can usually receive payment immediately after the closing documents have been signed. This is because the lender must verify and approve all the loan paperwork before the closing papers can be signed. When you will have access to these funds will often depend upon the form of payment – check or wire transfer – and your bank’s rules.
In a dry funding state, it can take a few days after the closing for the funds to be transferred to the seller. In these states, the mortgage lender has additional time to inspect documents and collect closing costs before delivering the funds to the seller. In practical terms, this means that a seller may wait up to four days for payment.
While these differences do not seem significant, if the seller plans to put the proceeds toward purchasing a new house, it will affect the timing of the transactions.
From Sale to Closing
Once you’ve accepted an offer, the time between the sale and the closing can vary, and it is often a matter of negotiation. Sometimes, the closing date will be based on factors such as how soon you need to move or how much time the buyer needs to secure financing and arrange other matters, such as a housing inspection.
Depending on your priorities, the time between sale and closing can affect which offers you accept. For example, suppose you need or want a speedy closing. In that case, you may accept a buyer’s cash offer over someone who needs financing, even if it means selling at a lower price. However, it is typical for home purchases to have 30-day or 45-day escrows, although 90-day escrows are not uncommon. Let’s examine that period further.
While every sale is a little different, the following is typical in a house sale:
Earnest Money: When you accept a buyer’s offer, the buyer typically places earnest money into an escrow account, usually ranging from 1% to 3% of the home’s selling price. This deposit signifies the buyer’s commitment to the purchase, and the funds are held in this account until the sale closes.
Title Search: An offer to purchase typically has multiple conditions attached. For example, an offer to purchase is usually contingent upon confirming that the title to the property is clear of liens and encumbrances (apart from a mortgage). A title company conducts a search of property records to confirm your ownership and legal right to sell the property. They also check for any outstanding liens, unpaid taxes, mortgage amounts, or other issues that could affect the sale.
Property Inspection: Another common condition of the offer is requiring that the house undergo and pass a housing inspection. The purpose of the home inspection is to assess the property’s condition, and let the buyer know whether any repairs are needed. Frequently, repairs will become part of the sales negotiation. In other words, if an inspection reveals any significant issues, the buyer can seek to have the seller fix a problem or reduce the selling price, all in the interest of negotiating the final sale price.
Final Walkthrough: Before closing, the buyer will likely perform a final walkthrough to ensure the property is in the agreed condition, with any repairs completed as negotiated.
Once the deal looks final, the buyer’s lender will deposit the purchase funds into the escrow account.
Closing Day: What to Expect
The more organized the process and the fewer hiccups discovered in the title search, inspection, and loan paperwork, the smoother the closing will be. Your presence on the closing day may not be necessary if your agent has prepared and obtained all the documents beforehand. However, you may need to visit the title office to sign documents. If so, have your photo ID, house keys, and receipts for any agreed-upon repairs. You’ll need to sign the closing statement, affidavit of title, bill of sale, and deed.
After that, once the buyer signs all the required documents, the sale is complete. As noted above, when you receive your funds will depend on whether you live in a wet-funding or dry-funding state and how your bank handles funds. (For example, some banks will put a hold on funds deposited by check for several days or even weeks).
The Legacy Group Knows the Inland Pacific Northwest
Whether you’re ready to sell your current home or need help finding your next one, The Legacy Group Real Estate is prepared to handle your real estate needs.
Our team has the expertise and experience you need to get the most out of your house sale in terms of getting top price and outstanding service. For over 15 years, we have successfully navigated the ups and downs of the markets in eastern Washington, northern Idaho, and Montana. We can provide you with the expert guidance you need to make informed real estate decisions.
Make sure your interests are being represented by the best. Reach out to the Legacy Group today.