The assumption doing the most work here is what "committed" means in their term sheet. Funders who write that clause typically define commitment as the moment funds leave their account toward escrow, and if that happened, their argument has teeth even though your exposure was near-zero in duration. The question is whether "funds hit escrow" in your situation means their wire landed and was held, or whether the title company treated it as uncommitted until both sides of the A-to-B were confirmed. Those are two different fact patterns and the outcome on the fee likely turns on which one actually occurred.
The risk you did not mention: the relationship structure. Your sister's boyfriend is the wholesaler, which means if you push back hard on the funder, the friction lands in a place that affects more than this transaction. That is not a reason to pay a fee you do not owe, but it is a real variable in how aggressively you pursue it.
On the merits, a few operators have won this argument, but they won it at the term-sheet review stage, before closing, by negotiating language that tied the fee to a completed B-to-C leg or to funds being outstanding for a minimum time window. After the fact, with a "committed equals earned" clause in writing, the funder has a defensible position. Whether you eat the $1,800 or fight it is a question of what the term sheet actually says word for word, what the title company's records show about when funds were released and returned, and whether you want to spend relationship capital with this funder over that number.
If the wire came back intact same-day and their capital was genuinely at risk for under two hours with no completed transaction, you have a reasonable case to negotiate down to a partial fee. That is a conversation, not a dispute, and it goes better if you open it that way.
What does the term sheet say happens if the B-to-C leg fails to close, specifically?
