What is the primary purpose of the Good Funds Settlement Act?

The primary purpose of the Good Funds Settlement Act is to ensure proper settlement funds. This act was established to require that all funds necessary for closing a real estate transaction be "good funds," meaning that the money must be guaranteed and readily available upon disbursement. This provision helps protect all parties involved in the transaction by minimizing the risk of bounced checks or unverified funds, which can lead to delays and complications during the closing process.

By requiring that funds be delivered in a way that guarantees their availability, the Act provides a more secure and reliable framework for real estate transactions. As a result, it helps create transparency and efficiency in the settlement process, fostering greater confidence among buyers, sellers, and lenders. The focus on valid funds streamlines transactions and contributes to the overall integrity of the real estate market, aligning all parties' interests and facilitating smoother closings.