Why would we sign all the documents, put down all our money, and have to wait another day to receive entry into our home?

This was a question posed to me by a client recently and it is a fantastic question that deserves an answer.  It doesn't make sense that you would pay for a home and have already signed the documents and still be waiting to get the keys, right?

Well, the problem here is that even though my clients put down a sizeable down payment, they were still not paying for the home in its entirety.  Like many other people, they were also obtaining a mortgage loan.  When you obtain a mortgage, the house is not completely paid for until the mortgage company sends the loan amount, commonly known as "funding the loan".

Funding a loan is unfortunately not as simple as pressing a button.  In fact, many loan companies won't even fund on the same day that the buyers sign.  They must receive the signed documents and review them for accuracy and to ensure that they have all the necessary signatures.  On rare occasions buyers may have to come back in and sign the paperwork again.  This is most likely to occur when dealing with Power of Attorney signatures where one person is signing for another using a Power of Attorney.

Once the bank has determined that everything is in order they will release the funds.  However, it still takes about 2-4 hours to reach the title company because it must go through the federal reserve before reaching them.  Once the title company receives the wired funds and matches it with the correct property, they will send funds to the seller's mortgage being paid off (if there is one) and will cut checks to the seller, real estate companies and anyone else who is being paid out of closing.  They will also record the transaction with the County Assessor's office and the buyer will be the official new owner of the home!

Thank you very much for the excellent question, Amy.  I wish you and Mike the best in your new home!