You’ve signed the closing documents, transferred your down payment and closing costs, and finished at the title company. Congratulations, but don’t load the furniture into the house just yet.

Signing your documents does not necessarily mean the purchase has funded or that you are entitled to possession of the property.

What Does “Funding” Mean?

Funding is the point when all money required to complete the purchase has been received and approved for disbursement by the title company.

If you are financing the home, your lender will usually review the signed closing documents to make sure everything was completed correctly. The lender must then authorize the release of the loan funds. The title company must also confirm that the buyer’s required funds have been received and that all conditions of closing have been satisfied.

Only after those steps are completed can the title company disburse the money to the seller and the other parties involved in the transaction. That is why you may hear your real estate agent or title company say the transaction is “closed and funded.”

Source: Texas Real Estate Commission, One to Four Family Residential Contract

A buyer could sign in the morning and receive funding approval later that day. Occasionally, lender questions, missing documents, wire delays or closing late in the day can push funding into the following business day.

Why Must Funding Happen Before You Move In?

Unless your contract provides otherwise, possession is typically delivered after closing and funding, not simply after the documents are signed.

Before funding, the seller has not received the proceeds from the sale, and the transaction is not fully completed. Allowing a buyer to move in early could create serious problems involving ownership, insurance, liability and the condition of the property if funding is delayed or does not occur.

That is why buyers should not:

Your agent should receive confirmation from the title company that the transaction has funded before telling you that you may take possession.

Sometimes a contract includes a temporary lease or another written agreement allowing the buyer or seller to occupy the property at a different time. Those arrangements must be negotiated in advance and documented properly. They should never be based on a verbal understanding.

We will discuss possession with you before closing day so you know exactly when to schedule movers and when you can expect to receive the keys. We don’t want you sitting outside the title company with a moving truck, wondering why you cannot enter your new home.

Once the required documents are signed, the money has funded and the terms for possession have been satisfied, the moment we have worked toward has finally arrived.

THE DEBRA WEST TEAM  |  RE/MAX ELITE GROUP