Lease Options/Double Closing - Posted by Jeff C.
Posted by Jeff C. on April 02, 2002 at 17:22:47:
I have a question about doing either an option or lease option…and what happens when you go to finally close the deal. I have never done either and I am confused about a few things. I’ll try to make this simple.
Let’s say I get a lease option with a seller, and secure a lease option with a tenant buyer. After 1 year the tenant buyer decides to purchase the house. As I understand it, I now will purchase the house from the seller and then sell it to my tenant buyer. Many people refer to this as a double closing. Well, here in WI I don’t think double closings are legal. Under state law, no property may be sold more than once in 24 hours.
I guess my questions on all of this revolve around the closing timeframe and costs. When I close with the seller, they will pay the WI transfer fee ($3/$1000 of price), they will pay title insurance ($600-$800). I (as the buyer) will pay the remainder of the title ($150) and the recording fees ($70). Now, will all of these respective fees need to be paid again when I go to close with my buyer?? It seems strange that as the new seller for this property I will need to pay somewhere in the $1200 range to close just a few days later… But I know the new buyer’s lender will want clear Title before they close the deal. Should I get the new buyer to pay for these fees?? Am I missing something??
Also, with the 24-hour rule here in WI, is there any way to avoid having to wait? I’m guessing that it will take significantly longer than 24 hours given the title work that needs to be done. I’m just a new investor and a bit confused on this so any help would be GREATLY appreciated. Thanks!