Disbursement is the process of distributing funds from the escrow account at closing. The settlement agent — typically from the title company — acts as a neutral party responsible for ensuring every dollar is sent to the correct recipient according to the terms of the transaction. Disbursement is the financial culmination of the entire closing process, and accuracy is critical because errors can result in liens, delays, and legal complications.
The disbursement process follows a specific order. First, the buyer's cash to close is received (usually via wire transfer), and the lender funds the mortgage loan. Once all funds are collected in the escrow account, the settlement agent disburses them according to the closing disclosure. The seller's existing mortgage is paid off first (the title company wires the payoff amount directly to the seller's lender). Then transfer taxes, recording fees, title insurance premiums, real estate commissions, and all other closing costs are paid. Finally, the seller receives their net proceeds — the remaining amount after all obligations are satisfied.
Disbursement typically occurs on the closing date or the day after, depending on the timing of document recording and lender funding. In some transactions — particularly dry closings — documents are signed first, and disbursement happens later once the lender confirms funding and the deed is recorded. The buyer generally does not receive keys until disbursement is complete and the deed is recorded.
The settlement agent follows strict procedures to ensure disbursement accuracy. Every disbursement must match the approved closing disclosure. The agent verifies wire routing numbers before sending funds, confirms payoff amounts with existing lenders, and ensures all prorations are calculated correctly. Any discrepancy — even a few dollars — must be identified and resolved before funds are released.
At Beycome Title, our closing team manages all disbursements through secure wire transfers, with multiple verification steps to prevent errors and protect against wire fraud. We provide a detailed settlement statement showing every dollar in and out, so all parties have a clear, auditable record of the transaction. Sellers typically receive their proceeds within 24 hours of closing. Get your free closing estimate.