Posted by Jim Kennedy - Houston, TX on January 28, 2000 at 10:37:31:
Dave,
Just curious - in what area are your located?
Thanks in advance.
Jim Kennedy,
Houston, TX
Simultaneous vs. Dual Closing - Posted by Chris
Posted by Chris on January 28, 2000 at 05:07:30:
I thought that these were two terms for the same thing but I have a feeling that I am wrong. I believe one would use an assignment of contract form and the other method would use two seperate purchase contracts-one that you give the seller and the other that the buyer you have lined up gives to you.
It appears that the two contract method has the advantage of shielding the profit that you will make from the other parties and would also result in your buyer or seller not being aware of the other party unless you told them.
Which one of these is the simultaneous method and which is the dual? I’m guessing that the dual uses the two contracts.
Also, would the two contract method result in increased closing costs over an assignment due to extra stamps,etc.?
-Thanks for the help on clearing this up, Chris
Re: Thanks for the help everybody! - Posted by Chris
Posted by Chris on January 29, 2000 at 24:42:48:
nt
Re: Simultaneous vs. Dual Closing - Posted by Dave T
Posted by Dave T on January 28, 2000 at 08:50:41:
In my area of the country, local usage connotates something more specific. A simultaneous closing and a dual closing both involve three parties, A (the seller), B (the investor), and C (the buyer). In both instances A sells to B, and B sells to C. In both instances, there are two transactions and two sets of closing costs.
Now for the distinction. In a dual close (or double closing) B completes the purchase from A with his own funds, then sells to C.
In a simultaneous closing, B sells to C then uses the sale proceeds to complete the purchase from A. Both settlements occur on the same day, and C is the true source of funds received by A. Since the settlements are deemed to have occurred simultaneously, it did not matter that the settlement between B and C took place before the settlement between A and B.
Again this is just local usage, and may not be the generally accepted definition everywhere.
Re: Simultaneous vs. Dual Closing - Posted by BRnBA
Posted by BRnBA on January 28, 2000 at 08:28:01:
Chris, to add to Steve Cooks input, an assignment is more often used when assigning to another investor and a simultaneous close when selling to an individual. Judy Miller wrote an article on simultaneous closes that you might find informative, you can find it in the articles section.
Re: Simultaneous vs. Dual Closing - Posted by SCook85
Posted by SCook85 on January 28, 2000 at 06:40:15:
Chris,
Your assumption that they were two names for the same thing was correct. Dual closes and simultaneous closes bothe require two contracts and 2 settlements. We simply call the process of assigning the contract an “Assignment”. In this case you only have one closing.
And you were correct about having additional closing costs to do a simultaneous close.
Hiding a profit is one of the main reasons for doing a simultaneous close, some others have to do with titling and lenders who will not lend for an assignment.
So you were correct across the board.
I hope this helped to clear it up.
Happy Investing!
Steve