Assignment and Double Escrow

22 Replies

In my Kansas City (Kansas and Missouri) Double Escrow is now illegal. How do you handle Assignment contracts without parties having a problem with the amount of profit?

have you ever used Acurate title in overland park?  they are investor friendly

If @Gordon Cuffe's suggestion doesn't work, I would just suggest pre-screening your buyers more and building rapport.  If simultaneous closings have been made illegal, you're going to have to focus on more buyers that don't care how much money you make as long as they have a good deal on their end.  They ARE out there.  Just take some digging.

@David Battle  where did you get the info that double closings are illegal? Is it actual statute or does the title company just not want to do it? If it's by statute what's the reference? I'd like to research it.

Thanks!

@David Battle  Do you have any legal citation for your statement that double closings are illegal?  Did you read of such a law?  Or did an escrow agent or title company tell you that it was illegal?  If it's actually against a law in MO or KS, I'd like to read the details.  Thanks!

Double closings are not illegal in Missouri.

Originally posted by @Jim Viens:

@David Battle  where did you get the info that double closings are illegal? Is it actual statute or does the title company just not want to do it? If it's by statute what's the reference? I'd like to research it.

Thanks!

 I was writing the same question while you were.  And I'm not even in KS or MO.  I like to see where various state legislators go with this type of thing.  But most of what it ends up being is bank or escrow or company policy.  Not law.  That being said, I'm curious.

@Gordon Cuffe @Jim Iorio     I actually spoke with them yesterday and now they don't do it anymore. That's the reason for this post. I will have to work on finding buyers if that is the only way. I don't have any buyers yet so now I know why type to focus on. Thank you for responding.

@Jim Viens  @Account Closed  I haven't seen the statute or law myself. I've been asking different title companies if they would do double escrows and that was the response I received.

@Vince Mayer  which title company do you use I've been searching for one that would perform double escrows?

I'm in St Louis but I've used Investors Title. Do you have them in KC MO?

@David Battle  

BTW, most buyers that are in the business for the long run don't care what you make as long as it's a good deal for them.

Well, then ask them to cite the law.  They are free, of course, to prohibit double closings. Telling customers something is illegal when it's against company policy is dishonest and bad business. They only way they get away with such crap is because customers don't question their supposed authority on the topic. 

I wonder if title companies say they don't do double closings because they are now approached by so many newbie investors asking this question.  If you showed up with two contracts and earnest money, and wanted to open two escrows, and then asked for what they would need to use the end buyer's funds......I wonder if they wouldn't be more helpful at that point.  Where I am the two escrows, but more importantly the purchase of two title policies, is what would drive the decision.  There's a legal dept. that advises escrow, but title company reps and escrow agents that work for investors usually know how to get things done within the policies of their company.  

Could also be that they're just mis-interpreting something. The only thing I can think of being on the iffy side is using the end-buyers funds to close the A-B transaction. If that's a concern you can always get transactional funding from a lender. Not sure what the going rate is but if it shouldn't eat into your profits too much. Maybe $1500? If you're using a double-close then you're likely making $10k+ on the deal anyway so that wouldn't be too bad to get the closing to go through. But I'd really press them on the illegality of double-escrow transactions. Get them to give you the KSA reference.

The problem is you are all using the terms "simultaneous" and "double" closing.  Stop using them as the title companies associate those words with the old way of doing them which, though not illegal, are against lender regulations.

When you call around, use the term "back to back".  This clearly indicates you want 2 closings and the funding for the 2 closings are separate.  That is the key and that is the purpose of transactional funding.

@Vince Mayer  unfortunately Investors Title doesn't extend across all of MO.

@David Battle   Double Closes are not illegal.  The title companies actually get twice the fees for doing them so it is to their benefit to allow them.  I used Old Republic Title to do a double close two weeks ago and they prefer it.

@Ryan Billingsley  Unfortunately they don't have an office close to Kansas City

I guarantee there is a couple investor friendly title companies in the KC area.  Investors are closing their deals somewhere!

@David Battle  

Google or go to the Yellow Pages to find title companies in your area. Call them and ask if they will do back to back closings. I f they ask what you mean, tell them that you will buy a property and close on it and then sell the property and close on it. Two separate closings and two separate escrows.

Better yet, go to the Title companies and talk to them. 

Alternatively, go to your buyers and ask them who they use as a Title company. You do need buyers to wholesale to and you don't have to be dishonest to get them. They would love for you to do their marketing for them and find the sellers.

i found it hard to find a title company that will do them.  quite frankly, the title person is either too ignorant to understate the wholesaling process or unwilling to learn something new.  try contacting a title co. and ask to speak with a senior escrow agent, not a sales rep. 

but yeah, some title cos. simply dont do them for whatever reason...fear?  of what, who knows...

you could always consider doing an assignment of contract with fee paid outside of closing. of course, you'll need the buyer to pay you cash - via cashiers check or wire transfer. but, it keeps the fee OFF the HUD, which can make everyone a little more comfy. but yeah, if you have a wicked deal, you buyer shouldn't care what you're making.  

@David Battle  - The MAREI group recommends Alpha Title on their website. I'd give them a call and see what they can do for you.

I've got a direct connection with an escrow agent with Alpha Title that does double closings. If you are interested, feel free to PM me and I will send their information. 

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