Good Funds Laws in Ohio

Why Funds Don't Move the Moment You Sign

Buyers and sellers are sometimes surprised to learn that their title company won't release closing funds the instant documents are signed. This isn't a delay tactic. It's the direct result of Ohio's Good Funds Law, found in Ohio Revised Code Section 1349.21, which sets strict requirements for how and when funds can be disbursed in a real estate closing. Understanding the law helps explain what can otherwise feel like an unnecessary wait.

What Ohio's Good Funds Law Requires

Ohio's Good Funds Law, amended in 2017, generally requires that funds over a certain threshold be verified as collected, or 'good,' before a title company can disburse them at closing. In practice, this means the title company must confirm that wired funds have actually arrived and cleared, rather than releasing money based on a check that could still bounce or a wire that hasn't fully settled.

• Funds over the statutory threshold generally must be received by wire transfer or another verified method rather than a personal check
• The title company or settlement agent must confirm funds have actually been received before disbursing
• The law applies to funds coming into escrow and to funds being paid out at closing
• The requirements exist to prevent closings from unwinding after the fact due to failed or fraudulent payments

How This Protects Everyone at the Table

The Good Funds Law might add a short administrative step, but it protects every party at the closing table. Sellers are protected from receiving a check that later bounces after they've already handed over the keys. Buyers are protected from a closing that has to be unwound because funds never actually cleared. Lenders are protected because their loan proceeds are confirmed before being disbursed against the property. In short, the law trades a small amount of waiting time for a much lower risk of a failed transaction.

What This Means for Your Closing Day

In practical terms, this is why title companies in Greene County and across Ohio ask buyers to wire funds a day or more before closing rather than bringing a cashier's check to the table, and why disbursements to sellers sometimes happen the same day or the next business day rather than the instant documents are signed.

• Wire your closing funds early, ideally the business day before closing, to allow time for verification
• Confirm wire instructions directly with your title company by phone, never solely by email, to avoid wire fraud
• Ask your title company for their specific timeline for disbursing seller proceeds after closing

Work With a Title Company That Gets It Right

Good funds compliance is a routine part of every closing at a well-run Ohio title company, and it exists to keep transactions safe for everyone involved. If you have questions about the timing of your upcoming closing or how funds will be handled, your title company should be able to walk you through exactly what to expect.