"1. Paperwork signed and loan approvals in place All closing documents are signed by both parties, including the buyer's loan paperwork, disclosures, and the seller's deed transfer documents. The buyer's loan has been conditionally approved, pending final lender checks. The escrow or title company holds the signed documents until the funds are released. 2. Funds are delayed due to processing The lender has not yet released funds, often due to last-minute verifications, underwriting backlog, document review, or banking cutoff times. Until the wire arrives, the title or closing agent cannot disburse funds."
"3. Closing proceeds on paper The signing appointment still occurs, and from a documentation standpoint, the transaction is complete. However, ownership does not legally transfer and the seller does not receive payment until the funding occurs. 4. Funds transferred and disbursed later Once the lender releases funds (commonly the next business day), the closing agent disburses them: Why do dry closings occur? Dry closings happen for several reasons: Lender delays: Underwriting cond"
A dry closing occurs when all parties sign closing documents but the lender delays wiring funds, so legal ownership and seller payment await funding. The escrow or title company holds signed paperwork while lenders complete final verifications, underwriting checks, or process wires, often the next business day. Causes include underwriting backlogs, last-minute verifications, document reviews, and banking cutoff times. Dry closings are permitted in some states and prohibited in others. They can avoid postponing signings but introduce risk and logistical challenges for buyers, sellers, and closing agents. Preparation requires clear communication, contingency planning, and knowledge of state rules.
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