Congratulation! You have just sold your house in one week for thousands of dollars on the ask for a price. You might be looking at this sale price with wide eyes, amazed that a large sum of money will soon be in your bank account.
Well the money will access your savings account, but maybe not as quickly as you hoped or hoped for.
After all, buying a property is a complex transaction. And getting the money from the buyer’s bank to yours involves a multitude of steps that protect both parties.
So how does this sweet deal turn into hard cash? Follow the money with us from offer to close.
When buyers pay the deposit
Good news: Buyers usually make a payment, called serious money—From 1% to 5% of the purchase price of the home within three days of an offer.
The buyers part with this money to show the seller that they are committed to buying the property and to prove that they can back up their offer with money. The seller then withdraws the good from the market. And this first installment will be charged against the total cost of the house.
But this moola will not yet be deposited into your vacation fund. Rather, it is held by a third party, such as an escrow company, real estate company, or lawyer, until the day of closing. This third party keeps the payment until the contract is finalized.
This way, if something is wrong between the contract and the inspection, the neutral party can fairly distribute the deposit, usually to the buyers.
However, if the buyers fail, cancel the sale without a legitimate reason, or miss key contract dates, the seller may have the right to keep the money.
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Watch: Sellers: Solve These Problems Before A Home Inspection
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When door-to-door sellers receive the down payment
OK, so the security deposit is a nice sum of money with your name on it. And soon there will be more as a down payment, right?
Not exactly. The purpose of a down payment is for buyers to prove to the lending institution or bank that they have enough funds to pay off the loan they are asking for (which will ultimately be your money).
“And the buyer is not required to make the down payment until a loan required for the real estate transaction has been approved by the lender,” he explains. David North, Designated Broker and Owner of Realtrua.com, in Redmond, WA.
Why home sellers have to wait to get paid
OK, there’s a deposit in an escrow account somewhere and more money in the buyer’s account with your name on it. Now what?
You wait.
“Along with the lender’s buyer’s loan approval process, which typically involves appraisal, buyers and sellers typically have various obligations outlined in their purchase and sale contract,” North explains. These can include inspections, repairs, disclosures and various contingencies. The specific deadlines and deadlines depend on your contract.
During this time, a title insurance company checks to see if the property meets the needs and requirements of buyers and their lender.
All closing process can take 30 days to three months, but the average delay is 50 days. Closing occurs when all of these steps have been completed and the loan is approved.
How home sellers are paid on closing day
Hooray, it’s payday! Also known as closing day, that’s when you’ll hand over the keys to your old castle, and buyers hand over a big piece of dough.
Here’s how it works: Buyers pay the remaining deposit (minus the deposit) at closing. It’s also when closing costs are paid.
“Once all the payments are made, the closing is complete and title passes from the seller to the buyer,” says North.
Immediately after the transaction closes, escrow pays the seller the full purchase price in the form of a cashier’s check or wire transfer, less any real estate fees, taxes or commissions that the seller is required to pay. to pay. (See more on wire transfers below.)
In other words, after the close, you will now have in your possession a breathtaking amount of money!
What you need to know about wire transfers on house payments
If you need to get paid for the sale of your home via wire transfer, the good news is that most of the funds are available within a day. However, in recent years the real estate industry has been plagued by electronic fraud.
“If you go this route, be especially careful when exchanging wiring instructions,” advises Bob gordon, a real estate agent for Berkshire Hathaway in Boulder, CO.
Use only secure or encrypted emails to exchange banking information.
Even better? “Pick up the phone and chat with your primary business,” he suggests. As long as you are aware and do your due diligence, wire fraud can be avoided.
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