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When is the transaction considered closed and funded?

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Red Sold rider on a For Sale sign with a family in the background.

01/10/2017 | Author: TAR Legal Staff

The Possession Paragraph in TREC contracts includes a checkbox for delivering the property to the buyer “upon closing and funding.” Sometimes there can be confusion about when the funding part of that provision has occurred because it is not defined in the contracts.

A transaction is considered to have closed and funded when the title company is prepared to issue funds—not when the funds are actually received in the seller’s bank account. Another way to describe it: A transaction has closed and funded when there are no conditions left that prevent the title company from moving forward.

People may think that a wire transfer is an instantaneous transaction; however, there are manual steps that must be taken by the receiving bank before the funds show up in the recipient’s account. It’s possible for wire transfers that occur at the end of a day to not be displayed in the seller’s bank account until the next morning or after the weekend. Nevertheless, the transaction has closed and funded. The seller must deliver the property to the buyer.

Note that if the title company has a federal wire reference number (often called a “fed number”), then the wire has been sent, regardless of whether the recipient’s bank has found that wire or posted it to the seller’s account.

Reprinted from the December 2016 issue of Texas REALTOR® magazine

Categories: Legal
Tags: legal, contracts, texas realtor magazine

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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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