💰 What Is Funding in Real Estate?

Funding is the moment when the lender sends the approved loan money to escrow, allowing the real estate transaction to move forward to recording and closing. Funding typically happens after the buyer signs loan documents and the lender gives final approval.

How Funding Works

Funding is one of the final steps in a real estate transaction. Before the lender can wire the loan funds, several conditions must be satisfied. Once the funds reach escrow, the transaction is ready for recording with the county.

Funding usually requires:

  • Final loan approval from underwriting
  • Buyer signing all loan documents
  • Escrow balancing the file and verifying closing figures
  • Lender confirming compliance and clear-to-close status
  • Title company issuing required insurance and documents

When the lender wires money to escrow, the file becomes “funded,” and the next step is recording the deed, which legally transfers ownership to the buyer.

Why Funding Matters

For Buyers:

  • Funding represents the final step before ownership transfers
  • Determines when you can receive your keys
  • Avoids delays in closing and move-in plans
  • Ensures the lender has approved all loan terms

For Sellers:

  • Signals that the buyer’s loan is fully approved and money is secured
  • Allows the sale to proceed to recording and disbursement
  • Reduces risk of last-minute loan failure
  • Triggers final payout of proceeds

Example of Funding

A buyer has completed inspections, the appraisal, and final underwriting. After signing loan documents, the lender verifies all conditions and wires $425,000 to escrow.

Once escrow receives the funds, the file is marked “funded”. Escrow then submits the deed to the county for recording, making the buyer the new legal owner.

Why Funding Matters for FSBO Sellers

For FSBO sellers, understanding funding helps prevent surprises on closing day and ensures you know exactly when the sale becomes final.

  • Funding signals that the buyer’s loan is secure
  • Helps coordinate move-out and possession timing
  • Determines when you will receive your sale proceeds
  • Avoids unnecessary delays caused by missing lender conditions

Listing through Flat Fee MLS with Brokerless gives you professional-level transparency during every step of the transaction.

Frequently Asked Questions

Is funding the same as closing?
No. Funding happens before closing. After funding, the deed must be recorded with the county to complete the transfer of ownership.

When do I get the keys?
Typically after the county records the deed — not at funding. Recording usually happens the same day or the next business day.

Can funding be delayed?
Yes. Missing documents, lender conditions, incorrect numbers, or appraisal issues can delay funding.

What happens after funding?
Escrow sends documents for recording. Once recorded, the buyer becomes the new legal owner and keys are released.