Warning on Simultaneous Closing - Posted by GG

Posted by HR on February 23, 2000 at 20:32:19:


I like Phil’s advice. Use your purchaser’s funds to purchase your property. To do this, in your sale’s agreement with your purchaser, require your purchaser to deposit funds 24 hours in advance with the same title company you will be using to buy the house with. This way, you use their funds to buy your house, and you keep the difference. Also require them to put down a larger earnest money deposit than you put down, so if you lose yours because they coulden’t close, you still make $$$. Also, do this in a corporation; if they are going to sue you for non-performance of the contract (which they very likely woulden’t; they will just keep your earnest money deposit), you sleep better at night knowing all they can get are the meager corp assets.

Just spread the two purchases a couple hours apart, and let that closing agent know what you are doing, and you should be fine. If they fail to perform 24 hours in advance, you have advance warning, you can always look to get the funds from another source (Phil gave you some) or look to delay the closing a couple days and find a new buyer. A friendly closing agent can come up with some excuse to delay it a few days.

This type of transaction has been the easiest I have done yet on a close.

Hope this helps.



Warning on Simultaneous Closing - Posted by GG

Posted by GG on February 23, 2000 at 08:36:25:

I want to close on this deal but I was warned about how the closing should take place, could any help?

I am buying a house from bank foreclosure but have not closed on it and I already have someone who wants to buy the house from me. I want to fund my purchase from the bank with the money I get from the person that wants to buy the house from me. What should I tell the Title company?, does the contract with my buyer need to be worded in a special way? I want to do this so I will not need to qualify to purchase from the Bank.

Re: Warning on Simultaneous Closing - Posted by Bill K. - FL

Posted by Bill K. - FL on February 23, 2000 at 21:45:53:

Where is your buyer getting the $ for this deal? It’s best if you can have one title company handle everything. Try to arrange this with your buyer. Give the title co. both contracts and tell them when you want to close. They will know what to do. If your buyer is getting a conventional loan, how are you handling inspections and any required repairs that his lender may require? (roof/termite) I assume you are buying from the bank as-is.

Re: Warning on Simultaneous Closing - Posted by NE Tx

Posted by NE Tx on February 23, 2000 at 09:48:27:

I have a deal Im closing on next week that will be a simultaneous close. Basically what you do, is on the Buyers contract in special provisions, write :
" Simultaneous closing, funds will be deposited in Escrow account"

Tell the title company youre doing a Simultaneous closing and that you want the funds placed in an escrow account to cover closing costs, pay the bank and pay you the difference.

Thats it, you go in and sign papers and then the Buyer goes in and signs papers. Search the archives for Simultaneous Closings. Theres several posts that goes into greater detail.

This is my favorite way of doing business, its fast simple and easy!

Something else to watch for is making sure the people get funded and close by the same date you scheduled for your closing with the bank.

I ran into a dilemma since I had to make sure my buyers were able to close at the same time my closing date was scheduled for. I had to get my buyers to go CONV loan instead of VA , so we could close quicker, by the date I had scheduled on my contract with the Bank. It was a Cash deal with the bank, so I didnt want to ask for additional time to close and run the risk of losing the deal.

Did you write your contract as a cash deal with the bank and how long of a closing period did you ask for ?

Happy Investing!


Re: Warning on Simultaneous Closing - Posted by phil fernandez

Posted by phil fernandez on February 23, 2000 at 09:28:30:

Do you have lines of credit established. Can you get an equity line of credit on another property you own ? If you do you could simply tap into the lines of credit come up with the money, close with the bank that you are buying the REO from, then walk down to the bank that is financing your buyer collect your money and pay of the line of credit. This is not exactly a simultaneous closing, but two closings spaced maybe a half an hour apart.

Or just talk to the title company and tell them what you are trying to accomplish with your simultaneous closing.