Transfer tax

[Tom Tram]

Hey guys, newbie here.. Just wanted to ask the pros about transfer taxes at closing. This might be redundant somewhere on the forums but I didn't manage to find anything.

So my question is, in a wholesale deal in which I would double close/assign who would normally pay the real estate transfer tax... seller or buyer? As a wholesaler obviously I wouldn't, but if the seller was on the hook for it, technically it would come out of my wholesale fee right?

[Will Barnard]

Steve is correct, if you are double closing, you will have two escrows and thus two costs, including two transfer tax liabilities.
Who pays each? Depends on what your contract stipulates.
Typically, here in CA seller pays transfer taxes, but there is a check box on the contracts that can assign this liability to either party.
I always ask seller to pay them. On a wholesale deal, if you get seller to pay them on the front transaction, you are covered.
On the second transaction to your buyer, you could then ask buyer to pay. keep in mind the more costs involved, the less the total spread. Spread is where your buyer and wholesaler gets paid, so the lower the spread, the less valuable the deal.

I would suggest not having two closings to avoid the transfer taxes. I developed a system to use a trust to avoid such scenarios as transfer taxes here in CA are also high and can include both city and county.

Another party mentioned using an entity and selling your interests in the entity. This is an option so long as you use a non asset holding or new entity to take title to the property. This is another way to avoid the transfer taxes.