Utah Good Funds Law = Smoother Closings
I. Introduction: The Equation for a Successful Closing
What is the single biggest factor standing between a successfully signed contract and a closed, funded transaction? Often, it’s not the negotiation, but the flow of money. For real estate agents, encountering a last-minute closing delay because of “bad funds” is a frustrating—and entirely avoidable—problem.
The equation for success is simple: Utah Good Funds Law = Smoother Closings.
This law is designed to safeguard the integrity of every real estate transaction in the state, ensuring that all funds disbursed at closing—from commissions to payoffs—are secure and immediately available. Understanding its requirements is essential for every Utah agent who wants to deliver a reliable closing experience for their clients.
II. What is “Good Funds” and Why Does It Matter?
The core of the Utah Good Funds Law (governing the escrow practices of title producers) is simple: A title company cannot disburse money from an escrow account until the funds deposited are “collected and cleared.” This means the money must be available for immediate, guaranteed withdrawal.
Why does this matter? The law clearly states what form of funds should be used for specific amounts and when a title company can consider those funds cleared.
III. The Title Company’s Mandate: The Responsibility of a Fiduciary
The weight of the Good Funds Law rests primarily on the title company, which acts as the settlement agent and fiduciary. We are legally and ethically required to protect all parties by adhering to strict rules regarding acceptable payment types.
For a closing to be funded and recorded on the same day, the funds must arrive in one of the following forms:
| Method | Status | Agent Action Required |
| Wire Transfer (ABA) | BEST (Guaranteed Good Funds) | Must be used for all large sums; safest method. |
| Cashier’s/Official Check | LIMITED | May be accepted for amounts typically under $10,000, but often requires verification and is subject to anti-fraud scrutiny. |
| Personal or Business Check | LIMITED | Can only be accepted for amounts less than $500. |
IV. Your Role: Preventing Delays and Protecting Clients
For real estate agents, the Good Funds Law presents a professional opportunity to manage client expectations and eliminate stress.
- Educate the Buyer: Ensure your buyer client knows that all significant funds due at closing (down payment, closing costs, etc.) must be sent by bank wire transfer. Emphasize that a wire transfer is the only guaranteed way to ensure a same-day closing.
- Timing is Key: Encourage buyers to initiate the wire transfer at least 24 to 48 hours before the scheduled closing time, when possible. Even legitimate wires can take hours to process and post to the title company’s account, and title companies cannot proceed until those funds are posted and verified.
- Preventing Fraud: Always remind clients to call and verify the wiring instructions with a trusted, known contact at the title company before sending any funds. This is the best defense against rampant wire fraud.
- Protecting Commissions: Agents should take comfort in the law, knowing that when the closing table is cleared, their commission check is backed by funds that have been collected, cleared, and guaranteed.
V. Conclusion: The Agent’s Edge
Compliance with the Utah Good Funds Law is not a bureaucratic hurdle; it is the cornerstone of financial security in real estate. By proactively guiding your buyers on the correct method and timing for delivering closing funds, you not only prevent costly and stressful closing delays but also reinforce your reputation as a knowledgeable, detail-oriented professional.
Partner with a title company that prioritizes strict adherence to the Good Funds Law. By working together, we ensure that the simple equation holds true: Utah Good Funds Law = Smoother Closings.

