How to perform or structure a Simultaneous Closing - Double Closing - Back to Back Closing?

Each state has different laws or requirements when performing or structuring a simultaneous, double or back to back closing and they're always changing. What they could do 5 years ago, they may not be able to now. Some states don't allow simultaneous closings, others do. Some title companies allow this, other's don't. It's in your best interest to search diligently for a title company that will handle this unique way of closing on a property. They will be able to assist you in making sure it is performed properly according to your state's laws and regulationsDouble closings and simultaneous closings have been around for awhile so don't give up after you talk to 15 title companies and each tell you it can't be done. Talk to investors and real estate agents who invest, get referrals until you find a title company that is creative. The right title company is worth their weight in Gold. Once you exhausted all your options, just remember, there are more creative financing options when buying foreclosures.

There are several ways in which you can perform a simultaneous closing double closing, or back to back closing. I am going to discuss one way to do it with foreclosures that are in default. In a nutshell, this is how it works. First you take control of the homeowners property via a Land Trust. This prevents any other judgments going on title before you get it closed. It also prevents chain of title issues and due on sales clauses. Either you or (preferably) your company becomes the Trustee of that Land Trust. Beneficial interest is signed over from the homeowners to another company with the proper paperwork. You can't have the same company being trustee and beneficiary or you have a conflict of interest and may cause title insurance issues.

Once you have negotiated the debt with the lender, your company, purchases the home from the homeowners for the agreed negotiated price. Your title company will prepare a HUD for this transaction. Your end buyer will then provide funds in escrow at title company. When your end buyer runs a title report, it still shows the homeowners last name in the form of a trust on title. So there shouldn't be any title issues.

Then your company sells the property to the end buyer. This is done simultaneously through your title company. Your title company wires the negotiated debt amount to the foreclosing lender. This must be the same as the first HUD 1. You get to keep the difference from the negotiated payoff amount with the bank and your end buyers purchase price minus any closing costs. It is best to consult with a legal professional or title company to find out if your state allows simultaneous or double closings. Each state will vary on procedures and your title company will assist you in the process.

Disclaimer: Every state is different and laws continue to change. This information is presented with the understanding that neither the publisher, author and or staff are engaged in rendering accounting, legal, and financial or other professional services. If legal advice or other expert assistance is needed, the services of a competent professional person should be secured. Considerable efforts are made to provide the reader with timely and accurate information; however there are no guarantees.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com