Real Estate Investing

Real Estate: Dry Closing vs. Wet Closing – What You Need to Know

One question that frequently arises during the loan closing process is the distinction between a wet closing and a dry closing. It’s a topic that can leave some clients feeling a bit parched, especially when they discover that some lenders only offer dry closings.

Wet Closings

In a wet closing, everything is finalized in a single swoop, while the ink is still wet on the paper. It’s like a whirlwind romance, where you fall head over heels and tie the knot all in the same day.

Dry Closings

On the other hand, a dry closing is more like a slow burn.

The paperwork has been signed, but it still needs to be reviewed and approved before the funds are disbursed. This process can take up to four days, allowing the ink to dry and ensuring that everything is in order before the transaction is complete.

A dry closing may sound like a walk in the desert, but it simply means that all the financial and legal aspects of the transaction are completed before the actual closing date. In other words, no cash or documents exchange hands at the closing table.

While it can be less nerve-wracking for everyone involved, it’s important to note that the funds may take a bit longer to transfer, so patience is definitely a virtue.

Funding Process

The funding process can take up to 4-10 business days after the dry closing, so you’ll need to remain patient until the funds come through.

On the flip side, a wet closing is like a tropical rainforest – it’s all about the abundance of paperwork and money that’s exchanged in person at the closing table.

This type of closing can offer a higher level of security, as all the documents can be double-checked and signed in the presence of the parties involved. However, with more physical paperwork and funds changing hands, there’s also a greater risk of discrepancies.

Lender Policies

While some lenders only offer dry closings, others may provide a choice between the two options. Ultimately, it’s up to the lender to decide which type of closing they prefer to offer. So if you’re thirsty for a wet closing, be sure to ask your lender about their policies.

Tips for Successful Real Estate Transactions

No matter what type of closing you end up with, keep in mind that clear communication, patience, and a cool head are always the keys to a successful real estate transaction. And whether you go dry or wet, just remember to wait until the ink is dry (or the funds are disbursed) before you break out the champagne.

By Dee Lewis

Dee Lewis is the VP of Marketing and Operations for The Funding Clinic; a visionary role in which she puts her experience to use helping businesses reach their goals with effective marketing strategies. From building automations to producing content, Dee stands out as a creative problem-solver who loves what she does.
When she's not working, Dee enjoys spending quality time with her husband and their two furry friends, Sugar and Spice.

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