At what exact point does your real estate closing happen? What is the precise moment your real estate transaction closed?
Is it when the seller signs? Or is it when the buyer funds? If the seller doesn’t have their money, can they keep their keys until they get their money?
These are common questions about a real estate closing we get as Florida Realtors who serve the Treasure Coast, particularly in Port St. Lucie Florida.
Often sellers ask us “Can I get my funds at the same time that I sign?”
Our answer to them is this: “It depends, and it is up to the closing agent to work that out with you.”
Where is a real estate closing defined?
The contracts that we use in the state of Florida have specific guidelines that determine the moment a real estate transaction is closed.
This is not just the closing date that is stipulated in the contract. There are more components.
Paragraph 4 in the Florida Realtors/Florida Bar-ASIS-6x (Rev.7/23) stipulates the following
CLOSING; CLOSING DATE: The closing of this transaction shall occur when all funds required for closing are received by Closing Agent and Collected pursuant to STANDARD S and all closing documents required to be furnished by each party pursuant to this Contract are delivered (“Closing”). Unless modified by other provisions of this Contract, the Closing shall occur on _________________ (“Closing Date”), at the time established by the Closing Agent.
Paragraph 4, Florida Realtors/Florida Bar-ASIS-6x (Rev.7/23)
What is a real estate closing?
Here is where “closing” is defined. There are two key elements:
- All funds required are received by Closing Agent AND Collected pursuant to STANDARD S
- All closing documents . . . . are delivered.
Signing documents as a buyer or seller is part of the process, but signing is not the standard for closing.
If you are the seller, you are not yet closed on your transaction once you have signed your side of the paperwork.
The two standards defined in the contract have not yet been met.
Your funds will not be available to you until the Closing Agent has determined that these two conditions have been met.
Funds Received and Collected
The first part of the definition of real estate closing is “funds received . . . and collected pursuant to Standard S.”
Standard S reads:
COLLECTION or COLLECTED: “Collection” or “Collected” means any checks tendered or received, including Deposits, have become actually and finally collected and deposited in the account of Escrow Agent or Closing Agent. Closing and disbursement of funds and delivery of closing documents may be delayed by Closing Agent until such amounts have been Collected in Closing Agent’s accounts.
Standard S, Florida Realtors/Florida Bar-ASIS-6x (Rev.7/23)
This tells you that all funds from the buyer must be collected and AVAILABLE to the Closing agent.
If a buyer brings a cashier’s check, it is not “collected and deposited.” It has to be deposited and then any waiting period imposed by the bank may apply.
Sending wired funds is preferable because it will get you to this point faster than waiting for any kind of check to be physically deposited and any clearing time.
If you are the seller and have already signed your side, this may be a cause of a perceived delay in the closing process. Notice the last sentence in the standard:
Closing and disbursement of funds and delivery of closing documents may be delayed by Closing Agent until such amounts have been Collected in Closing Agent’s accounts.
Standard S, Florida Realtors/Florida Bar-ASIS-6x (Rev.7/23)
Can a seller keep the keys until they receive funds?
Cooperative sellers who understand the process will deliver their keys and garage door openers at the same time they sign their paperwork.
But sometimes, this thorny practice comes up where a seller won’t give up keys until they are paid out. It is assumed that closing is not complete until they are paid.
The contractual definition of closing is not dependent on the Seller receiving funds. The determination of the closing moment is dependent on things at the Closing Agent’s office. Furthermore, Paragragh 6(a) addresses when the buyer can occupy the property (unless clearly addressed elsewhere):
Unless Paragraph 6(b) is checked, Seller shall, at Closing, deliver occupancy and possession of the Property to Buyer free of tenants, occupants and future tenancies. Also, at Closing, Seller shall have removed all personal items and trash from the Property and shall deliver all keys, garage door openers, access devices and codes, as applicable, to Buyer.
Paragraph 6(a), Florida Realtors/Florida Bar-ASIS-6x (Rev.7/23)
This is clear that the seller SHALL deliver occupancy and possession as part of the closing process. In reading on this matter, the Florida Realtors Legal Hotline (per an article in Realtors Magazine Sept 2023) points out that a seller who withholds the keys or access until they receive their funds is a violation of the contract.
We’ve seen this happen when a real estate closing happens in the late afternoon or early evening. The transaction closes per the contractual definition, but the funds to the seller are not available until the next day because of banking hours. It gets more complicated when a closing transaction happens on Friday afternoon late enough in the day that the banks are closed and sellers won’t receive their proceeds until Monday.
A real estate closing occurs when all the documents are signed, all the funds are collected in the Closing Agent’s Escrow Account (not the seller’s).
Can the seller get the funds when they sign?
Back to the question we get asked the most by sellers: “Can I get my funds when I sign?”
In most of our experience, that answer is “No.” There are other parts to the process of a real estate closing than a seller’s signature.
The one person who can actually confirm that closing is complete is the Closing Agent. The seller may have to wait for banking hours to resume to get a payout.
In our experience, it has been the same day when the seller signs in the morning, and the buyer signs in the afternoon. However we have had experiences with late afternoon closings and Friday closings that cause a delay in the release of the seller’s funds.
A wise seller will be patient with the real estate closing process.
Inspired by an article in Sept 2023 FL Realtors Magazine, written by Meredith Caruso, Associate General Counsel for Flordia REaltors.
