How to do Double Closing in Real Estate

1% on each side is probably enough since it will be considered a cash closing. The big expenses really come on closing costs when it involves a mortgage (origination fees, etc). Just make sure you get a decent enough profit for yourself as the taxes are usually much higher on a double close than an assignment as the property will be taxed with capital gains rather than a marketing/assignment fee.

The first thing I would do is have your attorney talk with the bank's attorney...I've found that the bank may want to use their attorney, but their attorney is just as happy to have someone else do the work and them still get paid. so get them in touch with each other as soon as possible and they can work something out.

As for who closes first, etc...as long as your attorney is experience in double closings, and he sounds like he is...he can work all that out for you.

The big thing you need to focus on is your end buyer...make sure they are solid and will show up. Then the rest is just gravy! Congrats! Best of luck and we'll talk soon.
~Andrea

Thank you Andrea! Very good advice.

I hadn't thought about the tax ramifications on the double-close either, so thank you on that!!! Huge!

Good to know on the attorney talking to the bank's attorney. The agent had said (and I've heard this before...maybe it is Tennessee in general), but the agent mentioned that the bank usually wants to use their own title company and if they use yours, that's fine, but you'll have to pay for it (rather than the bank). I know of 2 other people dealing with two separate banks on this issue locally. So in my offer, I told the agent to go ahead and put my attorney/title company on it (and if I have to pay for it, so be it...I'll build it in...still worth it). But if it is a "go", will definitely try to work it out.

I will definitely ask my attorney about the sell before the buy I understand he does these double closings often, so hopefully we'll be good to go (if this offer is accepted....if not, this is all a great exercise because I plan to do this in 2011)!

Yes, well-taken on the end buyer and making sure they are solid. All about this for sure!

Thanks so much Andrea for your reply. I so appreciate it!
Louisa

First. If you hire an attorney to do the double close you don't need a title company right? Second. I need proof of funds from my end buyer to get the initial purchase agreement signed unless I have POF right? Or wrong? I am working with a short sale and I have contacted the seller's agent to discuss whether the bank will allow an assignment or not. If not I may be doing a double close so I wanted to get the details worked out.

One more thing, the agent suggested I need POF even to submit an offer. Is that correct? Just the bank's requirements maybe?

Thanks, Ben

If you higher an attorney they can take the place of the title company. Most attorneys can do everything that a title company can do.

As far as getting the proof of funds from your end buy you do not necessarily need the proof of funds. This proof will only be shown you you. You will not send this proof to the bank. However, you will want to know that your buyer has the cash to close at some point.

Short sales, of course, deal with the bank. Banks generally do not like to have and or assigns on the contract so their is a large chance that you will need to do a double closing only because this may be your only option.

How far from closing are you concerning this short sale? I would assume a while correct? Short sales seem so long currently and I am curious how your transaction is going?

Suppose you were to sell your home you would want to know that those who will potentially buy your house have proof they can purchase. You would hate to see a buyer claim they can buy, work with you to get all the paper work needed, set up closing and ... no closing. What do you know they did not have the money to purchase.

Banks treat these transactions the same way. They want to know you can purchase. The way to do this is a pre-qualification letter or a proof of funds. Proof of Funds are stronger letters showing that you can indeed purchase the property.

You may not "need" a proof of funds but it sure helps the transaction go through better.

this thread has been very helpful to me here in San Diego regarding double close, cap gain taxes related vs assignment and taxation.... and all the other experience and insight. Thank yo so much.

I'm now wondering...another point has been made.. am I reading that we should be also asking our cash buyers for POF?