are assignments and double closings the same?
I’ve asked an investor that says they always do assignments but don’t do double closing due to it’s “illegal” in california.
I’ve always thought that they were the same and that in order to do an assignment you would need to do a double closing, one with the seller and one with the buyer(investor)…
really confused :banghead
No, they are not the same an assignment is simply just assigning the property over to another individual. Whether they give you the money for the assignment upfront or through a double closing is two separate things. You don’t have to do a double closing to do an assignment deal. Most people do a double closing to use the purchasers funds to acquire the property from the original seller. Another reason is to conceal the indentity of the purchaser and/or the seller, and also so the end buyer doesn’t know how much you’re going to make on the deal since they are to separate transactions.
I hope that answered your question!!!
I’m a newbie and I’m trying to get a better understanding of the what everything means. Can you pleae explain what you do for double closing? What forms does the seller/ buyer sign? After buyer/seller sign the documents, what do I do after that?
Any help would be greatly appreciated.
Sorry I figured out my answer, but which one do you think is better to do, Assignment or double closing?
I read since 2005 with new lending law, flipping in a “simultaneous” closing is illegal. Not that “double” closing is illegal.
Double closing is legal. Right? That means, you should close one deal with the seller and again close another with the buyer.
All these things, what happens about tax? Once you buy and then flip the property, don’t you have to pay tax?
First question, is an assignment and double closing the same? The answer is no. I agree with onepunch, an assignment means you assign your contract to the buyer and a double close is where you actually close with the seller in one room and then the buyer in the other. Second question, a flip tax is something of misnomer in that it is not a tax at all; at least not in the traditional sense of a levy imposed by a governmental or quasi-governmental entity for purpose of raising revenue. On the other hand, a flip tax is a revenue generating mechanism for a private land authority as it is basically a fee the co-op association or condominium association places the transfer of ownership of a condo or co-op unit. The fee can take many forms. It may be a percentage of the gross or net sale, a percentage of the profit made from the sale, a fixed amount that is pre-determined by the association or some other form. Originally, flip taxes were only imposed when a building was being converted. Associations soon realized that these flip taxes could generate an ongoing income for the associations. Soon it became commonplace for associations to excise a flip tax on all properties that were undergoing a transfer of ownership whether the building was in need of repairs or not. The buyer usually will pay the flip tax in order to get the property. However, if it’s a buyers market and the seller is having trouble getting an offer on the property, the seller may offer to pay the flip tax as an incentive for prospective buyers.