Title company in Illinois refuse to do a double close…

Wholesaling
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Title company in Illinois refuse to do a double close…

Robert Williams
New to Real Estate · Joliet, IL · Member since 2021 · 89 posts · 135 votes

So I have been calling around trying to get lists from title companies in Illinois (no lick as of yet) but was informed by all of them that they cannot do double closings unless the first transaction is escrowed, or they and the bank sign off. I am really disturbed by this as it makes wholesaling virtually impossible without the cash buyers fronting the money for the first close or actually having the money to cover the first transaction. I’m brand new to this and now I feel like all my work towards finding motivated sellers and paying for business cards and yellow letters is in vain… Can someone please make sense of this for me please?

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Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
5y

The double close is to hide the end buyer from the seller, right? Otherwise you could just assign the original contract to the end buyer and have them close directly.

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  • Nick Barber
    Member since 2021 · 18 posts · 22 votes
    5y

    this is not at all uncommon.  doulble closings while once popular and most every title company did them that is not the case.  locally i know of only one that will do it but they wont if the price differnce is to high or if the final price isnt in line with comps.  to many scams out there and title co get a bad rap when things go bad.  just make it one transactions and have your fee added.  if you are embarrased about your fee something is wrong.

    3Reply
  • Robert Williams
    OP
    New to Real Estate · Joliet, IL · Member since 2021 · 89 posts · 135 votes
    5y

    @Nick Barber thank you Nick. Ughh. Just when I thought I was on my way!

    0Reply
  • Nick Barber
    Member since 2021 · 18 posts · 22 votes
    5y

    just restructure the deal  if you are party a and dont have the money to buy it have party b buy it and have your fee added boom problem solved

    3Reply
  • Maurice Smith
    Investor · Richmond, VA · Member since 2020 · 108 posts · 135 votes
    5y

    @Robert Williams

    Robert how are you? Check into transactional funding. There are many companies, hard money lenders and others that lend out private capital for a quick short term loan to cover your 1st closing (24-48hrs). They will ensure all your contracts are in order, A-B and B-C, plus escrow, then they’ll wire the funds for the transaction. Normally they charge anywhere from 1-2%. This is a good way to close, as you actually close on the property, then quickly resale to the end buyer. The major con is this tax implications (much higher), but you are closing.

    5Reply
  • Maurice Smith
    Investor · Richmond, VA · Member since 2020 · 108 posts · 135 votes
    5y

    @Jesse LeBlanc

    Hey Jesse I think I caught one of your presentations with Dustin at the local REIA. Good to know you provide this service too.

    1Reply
  • Jesse LeBlanc
    Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
    5y

    Yes sir, at the time of that presentation I wasn’t offering this to the public, but finally decided to since so many were asking. 👍🏼👍🏼

    But you know I’m here to help with so many things if anyone needs it 🤘🏼👊

    3Reply
  • Louis Jeffries
    Lender · Chicago, IL · Member since 2010 · 149 posts · 127 votes
    5y

    @Robert Williams Transactional funding is the answer. This is where the lender will finance your purchase of the property based on the fact that you have an approved buyer. So you or your company buys the property from the seller and sell the property to the end buyer on the same day. With transactional funding the wholesaler is considered Party B, the Seller is Party A. There are no credit or income qualifying criteria for transactional funding. The only requirement is the end buyer has been approved for funding (unless they are a cash buyer. The advantage of transactional funding is if you do not want the end buyer to know your how much you are making on the closing. 

    1Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    The double close is to hide the end buyer from the seller, right? Otherwise you could just assign the original contract to the end buyer and have them close directly.

    6Reply
  • Jesse LeBlanc
    Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
    5y

    @Eric James a couple of reasons for the double close, but you're right that many use it for "hiding" the buyer from the seller or vice versa, some only do it so they aren't having to assign or disclose their fee and then there are places like NC where if you don't 100% disclose to all parties fully explaining the full process then ONLY double close WITH funding the AB side is allowed due to new legislation from the NC Bar.  Certainly cheaper to just assign, but depending on the transparency with the seller and wholesaler, they run the risk of losing the deal at closing if someone walked away.  (that has only happened to me once or twice over the years, when seller changed their tune knowing we were making a fee but didn't know how much until closing and they walked out).

    0Reply
  • Robert Williams
    OP
    New to Real Estate · Joliet, IL · Member since 2021 · 89 posts · 135 votes
    5y

    @Eric James @Maurice Smith @Louis Jeffries @Jesse LeBlanc Thank you so much! This information has restored my faith.

    2Reply
  • Jesse LeBlanc
    Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
    5y

    Absolutely sir, NP @Robert Williams

    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y
    Originally posted by @Jesse LeBlanc:

    @Eric James a couple of reasons for the double close, but you're right that many use it for "hiding" the buyer from the seller or vice versa, some only do it so they aren't having to assign or disclose their fee and then there are places like NC where if you don't 100% disclose to all parties fully explaining the full process then ONLY double close WITH funding the AB side is allowed due to new legislation from the NC Bar.  Certainly cheaper to just assign, but depending on the transparency with the seller and wholesaler, they run the risk of losing the deal at closing if someone walked away.  (that has only happened to me once or twice over the years, when seller changed their tune knowing we were making a fee but didn't know how much until closing and they walked out).

    Here in TX wholesalers who assign the contract can say they "aren't selling real estate", they are selling an assignable contract. I think this may be some help claiming they aren't selling real estate they don't own (because they aren't licensed). Seems one can't make that argument when doing double closings.

    1Reply
  • Maurice Smith
    Investor · Richmond, VA · Member since 2020 · 108 posts · 135 votes
    5y

    @Eric James That’s really the point of Double-closing (using transactional funding). The wholesaler is no longer assigning, rather performing in the A-B contract. Then, normally later on in the day (for example) the end buyer will perform on the B-C contract. During closing the transactional funding entity receives their money back, plus 1-2% and the wholesaler would retain the remainder of the proceeds. In this scenario, the title company/closing attorney is just dealing with two sales. One is not marketing property they don’t own.

    As far as identifying the end buyer, if one takes the time and due-diligence of being advised by an attorney on the legal methods of marketing their equitable interest in the property (contract) in their respective state they should be good to go. Further, by actually closing on the property, I have been advised that it should mitigate any arguments of brokering, because one is now selling a property they own.

    Recognizing every state is different, one should always invest money and time in legal counsel. As for Illinois, I believe their law requires a RE license if one does more than one assignment per year.

    All things considered, I’d actually advocate for a wholesaler getting his or her license as it opens up many options to serve a seller. If you look at the property and it’s marketable in its current condition, a listing would get the client the most and one could go that direction; however, if it’s not marketable or they don’t have the time to wait, then perhaps a cash purchase from an investor may be a better option.

    Just my two cents…Thanks for sharing perspectives from the Lone Star State.

    1Reply
  • Wanda Billups
    Member since 2023 · 1 post · 0 votes
    3y

    @Louis Jeffries will you lend on a large land deal?

    0Reply
  • Jesse LeBlanc
    Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
    3y

    This is pretty normal.  Make sure that you have your AB contract and your BC contract (Contract with your seller, then contract with your buyer) and double close.  

    Seek out a Transactional Lender for this scenario, you'll be able to get funding for the first transaction keeping them both separate.  Lastly, if a closing company refuses to do a double closing, move on to the next!  Most all will do the double closing for you, if you bring your own funds or use a Transactional Lender then it's legit 2 separate transactions which they close all day long. :)

    0Reply
  • Nate Bartlett
    Lawrenceville, GA · Member since 2021 · 24 posts · 5 votes
    2y

    I'm curious how much more will a double closing cost you vs. just assigning the contract? With an assignment, you simply receive a check for your assignment fee. On a double clsoe, you are paying for title services, attorney fees on both ab and bc closings, transactional funding fees, etc? Couldn't this be several thousand dollars? I just want to make sure I understand the implications of moving forward with a double close before I do one.

    0Reply
  • Louis Jeffries
    Lender · Chicago, IL · Member since 2010 · 149 posts · 127 votes
    2y

    Double closings are illegal in Illinois.

    Very simple answer why no one will do them in Illinois. That is why there is transactional funding that can get deals done for 2%

    0Reply
  • Louis Jeffries
    Lender · Chicago, IL · Member since 2010 · 149 posts · 127 votes
    2y

    @Nate Bartlett

    You are right with all things being equal. The assignment is cheaper for you but if you are trying to get more than the assignment fee and or you don't want the buyer to know how much you are making or thy will not do the deal, you do the double close or transactional funding.

    1Reply
  • David Ramirez
    Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
    2y
    Quote from @Robert Williams:

    So I have been calling around trying to get lists from title companies in Illinois (no lick as of yet) but was informed by all of them that they cannot do double closings unless the first transaction is escrowed, or they and the bank sign off. I am really disturbed by this as it makes wholesaling virtually impossible without the cash buyers fronting the money for the first close or actually having the money to cover the first transaction. I’m brand new to this and now I feel like all my work towards finding motivated sellers and paying for business cards and yellow letters is in vain… Can someone please make sense of this for me please?

     Hey @Robert Williams, 

    That depends on local laws and regulations, but you would just have to secure transactional funding, which usually incurs a charge of 1% of the money lent for that day to fund the A-B transaction. What they don't allow is pass-through funding, where you roll the funds from the B-C to the A-B.

    0Reply
  • George SkidisPro Member
    Rental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
    2y

    You should contact Shari Petterson. Her company does transactional funding. 314-750-5880

    0Reply
  • Jesse LeBlanc
    Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
    2y

    I'm still here to help anyone out for those double closings.  We just funded another 2 there in Illinois.  :)

    They can't stop from double closings, even if one chooses not to, there are a ton of other closing companies that still close these every day. 

    0Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    2y

    Hey @Robert Williams - You should check out Investors Title Services...my friend @Joe Mueller whos this title company and they do double closing often for investors.

    Also, what other title companies have you checked with?  I have used Chicago Title, Old Republic, and Fidelity they should all be able to help...

    In my opinion, it's way less about the title company and more about your attorney and how you communicate the process with the seller.

    [email protected]
    Quality Builders4.968 Reviews
    WebsiteView Page
    1Reply
  • Bryce Axelrad
    Houston, TX · Member since 2025 · 34 posts · 14 votes
    1mo
    0Reply
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