Marcus Roberts - Here is the correct definition of each:
A=Seller
B=Investor
C=End Buyer
A simultaneous closing is when party B uses party C's funds to close the A to B transaction, then simultaneously, the B to C transaction is closed using the very same funds in escrow, thus allowing the investor (party B) to do the deal without the use of his/her own funds.
A double closing is where party B brings his/her own funds (or that of borrowed funds) to close the A-B transaction, then right after teh B-C transaction closes with Party C's funds.
Both of which are back to back closings.
Note: Simultaneous closings are much more difficult to do these days due to new laws and many title copanies refusing to do them per their own in-house policies.
Marcus Roberts I'd recommend you spend some time reading in the Wholesaling forum. You're just asked a series of very basic questions that have been discussed many times.
Those two terms do not have precise meanings. Generally they mean two back-to-back closings on the same property. The first one is with the wholesaler as the buyer. The second is the wholesaler as the seller. The end buyer brings cash, and that same cash is used for both transactions. Very, very, very difficult to find a title company that will do this. As the wholesaler, you'll probably have to bring your own cash from a transactional funder.
Again, spend some time reading because there's a lot more on these and you other questions that been written by lots of folks.
Simultaneous closing is a term a RE agent would use when there are multiple buyers and sellers each with their own properties where first buyer is also a seller and cannot fund his purchase until his sale is closed and so on and so forth on down the line. There can be 3 or 4 all hooked together. It is another way to say contingent without actually divulging that it is contingent.
Marcus Roberts - Here is the correct definition of each:
A=Seller
B=Investor
C=End Buyer
A simultaneous closing is when party B uses party C's funds to close the A to B transaction, then simultaneously, the B to C transaction is closed using the very same funds in escrow, thus allowing the investor (party B) to do the deal without the use of his/her own funds.
A double closing is where party B brings his/her own funds (or that of borrowed funds) to close the A-B transaction, then right after teh B-C transaction closes with Party C's funds.
Both of which are back to back closings.
Note: Simultaneous closings are much more difficult to do these days due to new laws and many title copanies refusing to do them per their own in-house policies.
I'll stand by the statement there are no hard and fast definitions of these terms. Anytime you use either term, or if someone uses these terms with you, you should clarify exactly what's meant. Will Barnard's definitions may well be agreed to by the circle of people he works with, but I've heard these terms used very loosely. Specifically, I've heard numerous people use "double close" when the transaction being described was what Will is calling a simultaneous close.
I agree with Will's definitions, but I also will agree with Jon that the terms are sometimes used interchangeably by those who aren't aware of the distinctions that Will has mentioned.
I agree Jon, which is why it is important for investors to understand which is which so that they call it the right name. BP is a great place for that and many other things.
You certainly will not find it in the dictionary, however, the terms I laid out are the correct ones, regardless of how many others incorrectly interchange the terms.
Will's Definition makes sense. It also makes sense to clarify with whom you are speaking the actual definition in the context to insure no misunderstanding or misinterpretations.
I essentially knew what it meant but as John pointed out sometimes it is used interchangeable hence the confusion.
That is correct Marcus. Similar to another situation where investors quote, "I can sell you this property at 65% of value." Well, on the surface, that sounds great, but one needs to clarify with that statement the following, does that 65% of value include the cost to repair to bring theproperty to that value. In other words, is the all-in cost (acquisition PLUS rehab) equal 65% of exit value?
No matter who you talk to, you should always clarify what exactloy they mean is people in RE seem to inter-twine many different terms, regardless if they are correct or incorrect.
Will is almost right, both are back to back closings but in escrow world they are differentiated by the terms wet closing and dry closing. Dry being the temporary use of c's funds to close the a-b escrow. Wet being the use of independent funds to close the a-b. Thus the use of flash funds in the a-b would be a wet close.
I have noticed that some people throw around the terms interchangeably. My experience is that a double close is two contracts, two escrows, two sets of fees and two title policies. On a good day you can you use the buyer's funds in Escrow B to close the sale in Escrow A. On a bad day, you need transactional or bridge funding. I think it's safe to say we are in a bad day phase and that escrow agents and most title companies are reluctant to funnel money backwards.
The simul close thing, with one escrow and and principals A, B, and C I've never actually seen happen in 12 years of buying and selling. I know they are done, but I've never had an escrow agent or title company that would do it.
I agree, K. Marie Poe, the title companies won't allow C's funds to close A-B. Hence Transactional funding. I've seen others do it, but I suspect the title company didn't know exactly what the closing agent was doing.
Will is almost right, both are back to back closings but in escrow world they are differentiated by the terms wet closing and dry closing. Dry being the temporary use of c's funds to close the a-b escrow. Wet being the use of independent funds to close the a-b. Thus the use of flash funds in the a-b would be a wet close.
I agree, both those terms are also other means to state Simul and double closings.
I have used these terms in many other threads to explain the diference between these two types of closings. Like I stated before (as have others) dry fund closings are difficult to do, in large part because Title companies will not do them or insure the transaction.
In my area we do simultaneous closings routinely. One reason may be that we close with attorneys rather than in title companies. They don't have a problem with them. Since they already have certified funds in place for the B to C closing, there is no chance the A to B closing won't get funded and closed.