How Long Can a Title Company Hold Funds After Closing?

Selling your home is a big milestone, but once the papers are signed and the keys are handed over, most sellers have one question left: When will I get paid? While closings are usually smooth, delays in receiving your funds can feel frustrating. In this article, we’ll break down the closing process, explain the difference between wet and dry funding, and walk through what to expect after you’ve sold your home. Plus, we’ll share a few tips to help make sure your payment doesn’t get held up.

Understanding the Closing Process for Home Sellers

The closing process marks the final stage of a home sale, when the property legally changes hands from the seller to the buyer. It involves paperwork, signatures, fund transfers, and filing with the county recorder’s office. The title company plays a central role during this phase, managing the escrow account and making sure all legal and financial obligations are met before money changes hands.

Once everything is signed at the closing table, the buyer’s funds are held by the title company and placed into escrow. From there, the title company is responsible for disbursing the money to the appropriate parties. This typically includes paying off the seller’s mortgage, covering agent commissions, and distributing any remaining balance to the seller.

Wet Funding vs. Dry Funding: What’s the Difference?

The speed at which funds are released after closing often depends on the type of funding used in the transaction, either wet funding or dry funding.

Wet funding is common in many states. It means the buyer’s lender has provided the money at or before closing, allowing the title company to begin disbursing funds as soon as the documents are signed and conditions are met. In these cases, sellers may receive their proceeds the same day or the next business day, depending on how quickly the transaction is recorded and wire transfers are processed.

Dry funding, on the other hand, means funds are not released until after all documents are signed, reviewed, and sometimes re-approved by the lender. This method is more common in states with stricter funding requirements. With dry funding, the title company must wait for lender approval and possibly recording confirmation before sending any funds out. This can result in a delay of one to three business days or longer.

When Will You Receive Payment After Closing on a Home Sale?

In a typical residential closing, sellers can expect to receive their net proceeds within one business day after the transaction is finalized and recorded, if wet funding is used. For dry funding, the wait time may extend by a few days.

However, delays can happen for a few reasons:

• Bank processing times: Wire transfers and cashier’s checks may take time to clear, depending on the bank.
• Recording delays: The deed must be officially recorded with the county before funds are released. If recording offices are backed up or close early, this can push the timeline back.
• Lender review: For dry funding states, the lender may require post-closing document checks before authorizing the release of funds.

While most title companies work quickly to get your payment to you, it’s normal for it to take up to 72 hours, especially with dry funding or if the closing occurs on a Friday or just before a holiday.

Tips to Speed Up Your Payout After Closing

If you’re eager to get your funds sooner rather than later, here are a few ways to help avoid unnecessary delays:

• Ask your agent or title company about funding type early on: Knowing whether your closing will use wet or dry funding helps set expectations.
• Provide wiring instructions ahead of time: If you prefer a wire transfer, make sure your title company has your correct banking info well before closing day.
• Close earlier in the day: Scheduling your closing earlier gives the title company more time to process everything the same day.
• Avoid closing on Fridays or before a holiday: Weekends and office closures can delay recording and payment processing.
• Stay in communication: If your lender or title company needs anything from you, respond quickly to prevent delays.

Final Thoughts

The bottom line is that it’s completely normal to wonder when you’ll get paid after selling your home. In most cases, you’ll receive your funds within one to two business days, but the timeline can vary depending on your lender, the type of funding, and how quickly documents are recorded. Understanding the process and asking the right questions can help reduce stress and ensure everything goes smoothly.

Need Help With Your Next Closing?

At Nest Title & Escrow, we make it a priority to keep your real estate transaction on track and your funds moving as quickly as possible. Whether you’re selling, buying, or refinancing in Tennessee, our team is here to help you every step of the way. Contact us today to learn how we can support your next closing with care, accuracy, and efficiency.