The excitement of closing on a Texas real estate deal can be quickly overshadowed by the question of when you’ll see the funds in your account. You may wonder, How long can a title company hold funds after closing?
Whether you’re a first-time homebuyer, a seasoned investor, or a seller waiting for your payout, understanding the timeline for funding after closing is crucial. The process might seem straightforward, but several key steps can affect how quickly the money is disbursed.
What Happens After Closing?
Once the closing process is complete, the real work begins. The role of the title company and escrow agent is to ensure the property transfer is legal.
Here’s what happens after closing:
- Title search and clearance. The title company verifies that the property title is clear and that all liens, taxes, and encumbrances have been resolved.
- Document recording. The documents related to the transaction are prepared and officially recorded with the county, securing legal ownership.
- Fund distribution. After recording, the title company will distribute funds according to the terms of the closing agreement.
After these steps, the transaction is final, and the buyer becomes the new legal property owner.
How Long Does Closing Take at a Title Company?
If this is your first time buying or selling property, you may wonder, How long does closing take at a title company and how long can a title company hold funds after closing? Typically, the closing process takes 30 minutes to an hour, but it can vary depending on the complexity of the transaction.
During this time, the buyer and seller review and sign all necessary documents, including the deed, loan documents, and closing statements. The title company ensures all paperwork is complete and accurate, clears any remaining conditions, and coordinates the transfer of funds. While the closing is relatively quick, the preparation beforehand, such as clearing title issues or meeting financing conditions, may take longer.
How Long Does Funding Take After Closing?
Many homebuyers want to know how long can a title company hold funds after closing. Most of the time, once the parties record all documents and satisfy the conditions, the title company distributes the funding reasonably quickly. In Texas, it typically takes between one and three business days. However, the timeline can vary based on the specifics of the transaction and other factors.
Escrow Accounts
Holding money in escrow is a standard process in real estate transactions. Escrow acts as a safeguard for both the buyer and the seller, ensuring all conditions of the sale are met before releasing funds.
Here’s how escrow works:
- Escrow account creation. The title company or a third-party escrow agent places the funds into an account.
- Completion of closing requirements. The title company ensures satisfaction of all contractual conditions, such as clearing any liens or confirming the property title is valid.
- Disbursement. Once the title company confirms everything is in order, it releases the funds to the appropriate parties.
Escrow provides security, preventing either party from walking away with money or property before the transaction is complete. However, it can also delay funding.
Dry v. Wet Funding
Wet funding means the title company disburses funds on the same day the closing documents are signed, allowing a fast transaction. In contrast, dry funding occurs when the title company holds the funds until the county records the closing documents, which can take several additional days. Texas is a wet funding state, so the title company typically disburses funds on the closing day once all documents are signed and verified. This process ensures a faster, more seamless transfer of ownership and funds for both the buyer and the seller.
Mortgage Approval
If the buyer finances the purchase with a mortgage, the approval process and funding transfer can take additional time. After the closing, the lender must process the final paperwork, ensure all loan conditions are met, and release the funds to the title company. This can cause delays if there are issues with the loan documents, last-minute changes, or if the lender requires extra verification.
Time Zone Considerations
Transactions may have delays due to time zone differences. For example, mismatched business hours may delay the funds if the title company is in one time zone and the lender is in another. Additionally, if the closing occurs late in the day or near the weekend, it may take longer to complete the final steps, further delaying the release of funds.
Recording and Administrative Delays
While title companies usually record documents on the same day, delays can happen due to county office backlogs, administrative errors, or high transaction volumes in busy markets. Any delay in recording can hold up the official transfer of property ownership and delay the release of funds.
Delays can also arise from issues unrelated to recording, such as missing signatures, incorrect paperwork, or a failure to bring required identification to the closing. These mistakes can delay the transaction and push back the funding timeline until the parties resolve them.
Final Closing Conditions
Certain conditions, such as the seller’s need to make repairs or finalize paperwork, must be fully addressed before releasing funds. Failure to meet these conditions on time can delay the funding process.
Choose The Curley Law Firm for Your Real Estate Closing Needs
When it comes to handling real estate transactions in Texas, The Curley Law Firm has the experience you need to help ensure a smooth closing and quick release of funds. For over 16 years, Adam Curley has helped hundreds of Texans with business and real estate transactions. He and his team can guide you through every step of the process, from ensuring proper execution of all documents to answering any questions.The Curley Law Firm provides clear, compassionate legal advice and deeply understands Texas real estate law. We pride ourselves on delivering personalized service and protecting your interests throughout the transaction. Whether buying, selling, or refinancing, our team will handle your real estate transaction efficiently and with your best interests in mind. Contact us today to learn how we can help.