What does "Good Funds" mean in real estate transactions?

In real estate transactions, "Good Funds" refers to funds that are readily available for use and can be verified as having been received in a secure manner. This is an essential concept in transactions to ensure that the funds are not only collected but also clear and usable at the time of closing. Good Funds are typically in the form of certified checks, cashier's checks, wire transfers, or other forms of guaranteed money that can be immediately accessed by the recipient.

This requirement helps to protect all parties involved in the transaction, as it minimizes the risk of payment failure or fraud. By ensuring that only Good Funds are used, the transaction can proceed smoothly and without delays pertaining to the availability of funds, ensuring a quicker and more reliable closing process.