When is the transaction considered closed and funded?
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.
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