Good Funds in Colorado

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Wet or Dry Settlement



Funds cannot be disbursed until they have been received and are either: Available for immediate withdrawal as a matter of right from the financial institution in which the funds have been deposited; or available for immediate withdrawal as a consequence of the agreement of the financial institution in which the funds are to be deposited or the financial institution upon which the funds are drawn. Any such agreement must be made with or for the benefit of the person or entity providing closing and settlement services for a real estate transaction. CO Rev. Stat. 38-35-125(2). "Available for immediate withdrawal as a matter of right" includes funds transferred by (a) any wire transfer; or (b) any certified check, cashier's check teller's check, or any other instrument as defined by federal regulation CC, 12 CFR 229.10(c). CO Rev. Stat. 38-35-125(1)(a).


The seller may waive the good funds requirement if: (a) It is specified as part of written closing instructions in advance of closing that the seller waives the good fund requirements and that the person or entity conducting the closing, unless such person or entity is the seller, is not to handle the receipt and disbursement of funds as part of the closing; and (b) Any holder of a lien encumbering the property up to the time of closing agrees, in writing, to such waiver and further agrees, in writing, to release such lien immediately upon receipt of a check from the closing drawn in the amount of the outstanding indebtedness secured by such lien. Such an agreement shall obligate the lienholder to release such lien regardless of whether the payoff check received has been or will be honored. CO Rev. Stat. 38-35-125(3).

Exceptions to Requirements

Funds may be advanced, not to exceed $500, on behalf of interested parties for the transaction to pay incidental fees for such items as tax certificates and recording or to cover minor changes in the closing adjustments. CO Rev. Stat. 38-35-125(2).