Double Close

Double close transaction in real estate involves three parties: A, B and C. A will sell the property to B and B in turn sells it to C. Such a transaction is also referred to as a double escrow transaction.

For example, Alex sells a property to Bobby for $1M. Bobby in turn will sell the property to Cindy for $1.2M. Bobby makes an instant profit of $200,000 by selling the property to Cindy.

An attorney should always be involved in a double closing deal to protect all the parties and the transaction. The end buyer is usually made aware the property he is purchasing is going to be in a double close transaction. Most buyers are ok with it provided it is disclosed upfront.

A title company that is familiar with the double closing procedures is chosen. Not all title companies do double closings, so it is best to be prudent and find a title company in advance that will perform a double closing transaction.

Advantages of performing a Double Escrow

The beauty of the transaction is that B does not have to have the money required to purchase the property from A. B can use "double close funding" or "flip funding" or "24 hour funding" or "transactional funding" to purchase the property from A. When C purchases the property from B, an escrow attorney will release the funds from "transactional funding" to A.

"Transactional Funding" is provided by private investors and private money is used. There are no credit checks, no upfront fees and it can be used for transactions from $100,000 to $100Million. In such a back to back closing, the investor is only lending the funds for a very short time, typically less than 24 hours.

When are Double Closing Transactions done? Double Closing transactions are done for short sales or foreclosures when an investor purchases a property from a distressed home-owner in a short sale and sells it to an end buyer whose funding is already in place.

Double Escrow transactions are also performed for bulk reo properties where B will buy a property from A. The party A involved is typically a bank and B is an investor. B in turn, sells the property to C, where C is the end-buyer.

To use transactional funding for a double escrow transaction, visit us at FREE Request for Double Closing Funding for a REO flip.

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