Double Closings

4 Replies

I'm a bit confused at the moment with something I was recently told by a mortgage company. This may be a state specific question (Alabama), but here goes...

Recently, I found a seller interested in selling, I got a great deal and got the property under contract. Yea me!...then...I found a potential buyer who had been pre approved by his mortgage company. Being new, and covering my bases, I called the Mortgage company and told them we would be doing a double (simultaneous) closing. I was then told that the mortgage company would not write a check to me, only to the originator of the sellers loan and the deal could not be closed.

Did I miss something????? 

@Phillip Dooley Your end buyer should ALWAYS be a CASH buyer. These are usually investors. What are your plans as of now?

David is correct.  I have done over 50 double closes exclusively in Alabama but they were not with retail buyers (buyers that go traditional mortgages).  I have sold to investors that used bank financing but it is almost impossible to sell to a buyer that is trying to use conventional mortgage financing.  Most conventional lenders want to lend on a seasoned properties.

Phillip what part of Alabama is your property located.

You'll most likely need to close the deal with cash first then close with the end buyer. Transactional funding could help but it comes with points, fees etc. 

If there is a way to possibly assign the contract to the end buyer to could be an option too. Doing a double close with "traditional" financing is risky. Best practice is to have a cash buyer. 

Originally posted by @Dave Worlund :

David is correct.  I have done over 50 double closes exclusively in Alabama but they were not with retail buyers (buyers that go traditional mortgages).  I have sold to investors that used bank financing but it is almost impossible to sell to a buyer that is trying to use conventional mortgage financing.  Most conventional lenders want to lend on a seasoned properties.

Phillip what part of Alabama is your property located.

 Hello Dave, I'm about 60 miles southeast of Huntsville and thanks forr the the advice.

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