Good Funds in Tennessee

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Tennessee has a Good Funds Exception of up to $1,000. Any amounts over that threshold must be in line with one of the methods required in § 47-32-102(2).


TN Code § 47-32-101 (2017)

Wet or Dry Settlement



Funds must be in one of the following forms: (1) Cash; (2) Federal funds wire transfer including electronic payment, as defined in federal reserve regulation CC (12 CFR 229.2(p)); (3) Checks issued by the state of Tennessee or a political subdivision of the state; (4) Cashier's check, as defined in 12 CFR 229.2(i); (5) Teller's check, as defined in 12 CFR 229.2(gg), that is issued by a financial institution and drawn or payable through a financial institution; (6) Checks issued by an instrumentality of the United States organized and existing under the Farm Credit Act of 1971, compiled in 12 U.S.C. ? 2001 et seq.; (7) A direct deposit by a financial institution to the account of a settlement agent held in the same institution; or (8) Checks issued from the escrow or trust account of a licensed Tennessee real estate broker and drawn on or payable through a financial institution within the same federal reserve check processing region as the location of the settlement agent in an amount not to exceed the earnest money paid by the purchaser and collected in the escrow or trust account. TN Code Ann. 47-32-102(3).


Settlement agent must have good funds before closing with a sale that involves 1 to 4 unit residential dwellings, vacant lots zoned or designated for use as residential property, or agricultural land. TN Code Ann. 47-32-103.

Exceptions to Requirements