My partner and I are about to put a probate situation under contract and have buyer lines up as soon as the seller signs.
I've been looking for a title company that can close double escrow in Chicago. What are good questions to ask? What information do I need to bring with me? Would someone be able to walk me through what the process should look like? Any referrals in the Chicago area?
You should not have a problem as long as you don't ask them to use the end buyer's funds to close the A to B transaction.
Thanks for the reply. We are indeed hoping to use the end buyers funds to close the A to B.
This will be our first deal and were under the impression this is how it worked in double escrow. We do not have the money to put up currently. Is it better to do an assignment?
Your best bet is used transactional funding. Gurus teach everyone to use the end buyer's fund which is a bad idea, and it could kill the deal if the title company let the end buyer know that you are using their funds to close A to B transaction.
Joe is right, you won't be able to do this in Chicago or probably anywhere. You will have to use your own cash or a 3rd party (transactional funder) cash to close the first transaction. Then the second transaction is done right after, paying off the transactional funding.
Call title companies asking for back to back closing, not double closings.
In a probate situation, all the ducks must be line up so all will go well at closing. As far as the back to back closing make sure the end buyer is not obtaining traditional bank financing otherwise the deal is dead. Traditional bank financing consider back to back closings as a FLIP and this will trigger a million conditions.
How about using Chicago Title Company? They are, ironically, owned by California-based Fidelity Title.
Until which time you have a signed contract that your seller can and will perform on as well as pass good title to a buyer that can and will satisfy the terms of the sale, you do not, as they say, have a deal.
The mechanics of double escrow closings vary. It may be necessary for you to transactioneer your deal by employing two, different escrow companies. The first one satisfies the sale aspects; the second one satisfies the money and you getting paid aspects. This, of course, is an awkward arrangement, cumbersome and can also be problematic as a list of issues too long for this thread may be created.
There are other ways to accomplish what you're trying to do. I like the idea of either buying the property yourself (if you do not wish to disclose your profit) or just telling your end buyer what your wholesale fee is and disclose that in escrow.
Yet again, since you are really not attempting to be a principal but rather an intermediary, the real principal can just pay you directly as would a referral fee be paid. No sense making this overly complicated.
I think the best information on wholesaling that I ever studied is the course presented, recorded and the accompanying manual by Mike Cantu, "Don't Get Voted Off Real Estate Island."
How do you think, @Elliot Erickson , the lender to the end buyer would you feel if the title company took their money and instead used it to purchase a home for you from the original seller? Some areas, here at least, require a day to record. What would happen if "C's" bank happened to rescind their loan between the two transactions? Deals die all the time. Would the title company call the bank, with sweaty palms, and say, "Sorry, but just yesterday we used your money to buy the house for someone else. It was only going to be for a day and we didn't think you'd mind. Ha ha." Oh boy.
These deals might have been popular some years ago, but they won't fly anymore.
The easiest way to do this would be to buy the house yourself using transactional money, praying that C's bank doesn't have a change of heart, and closing as fast as humanly possible with C. Many title companies will do this but the cleanest way is to do two separate transactions using two separate title companies. Deals fall out all the time and there are always risks that the end buyer's bank will pull out, leaving you on the hook with a house and a transactional loan.
If you decide to use transactional money, they will not purchase the A property until the end buyers have 100% of their funds in escrow.
Of course. Still, nothing precludes end buyer's lender from rescinding a loan anytime before it closes.
Even if they didn't, I'm not sure I'd be thrilled with a title company using my funds to buy a house for someone else and I don't care how long it was for. Title must follow my lender instructions.
First of all, if there is a C lender, it definitely make the back to back closing much less likely to be accomplished. Most transactional deals are with cash C buyers.
However in Jeff's scenario where the C lender/buyer backs out right before the BC closing, the title agent is able to unwind the AB transaction as if it never happened.
Thank you all for the great information.
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