Closing is the day the documents are signed and the money moves. A closing agent runs it: a title company, an escrow agent or a closing attorney, who holds the buyer's funds and pays them out to the seller, the seller's lender and anyone else the settlement statement lists.
The money moves by wire. The Federal Reserve Board describes a transfer over its Fedwire Funds Service as final and irrevocable once processed, and it sets a daily deadline for transfers that banks send for their customers. Each bank sets an earlier cutoff of its own for wire requests, so the buyer needs the bank's cutoff time as well as the closing date.
A processed transfer cannot be revoked, so the buyer checks the wire instructions by phone before sending any money. In a 2016 Kansas house sale, instructions altered by a criminal reached the buyer by email, and the purchase money went to an account the criminal controlled; a jury later put most of the fault on the sellers' agent, who conceded she had not confirmed the instructions (order of the federal court in Kansas, June 25, 2018). The wire instructions guide tells the case from the court record and sets out the callback, made to a number the buyer found on the day of signing.
On the seller's side, the sale proceeds and the payoff of any loan the seller owes also leave by wire, and the seller confirms payout instructions with the closing agent on a call the seller places. The callback, the bank's cutoff and the funding wire each get an internal row in the deadline register, a few business days ahead of the closing date or on it. For a wire that has already gone to the wrong account, the wire guide links the first steps of the fraud response.
Earlier stages of the deal are on the due diligence and negotiation pages.
Reading path
- How to verify wire instructions before a closing
The phone callback that confirms where closing money goes, made before anyone sends a wire.