double closings and avoiding seasoning

Does anyone have experience with double closings ? I have a short sale property in Albany New York that was just put under contract for 155k with a realtor, the payoff to the bank is 117k. I’m splitting the 3% commission w/ my realtor and I’m leaving 25k on the table. My thoughts are to do a double closing but I’m unsure how to get around the seasoning part, especially with a FHA purchaser. Is seasoning an issue with double closings? How do double closings work? how do i protect my self in the event the new buyer never shows up etc

Well, you have a Realtor in the game… have him do it as an agent and dont get on title.

I dont understand, can you expalin what you mean by “have him do it as an agent and dont get on title”

Well, since he is an agent, he can represent your buyer and get paid as a realtor

If someone is “your” agent, they can’t represent the buyer too. If it’s his agent, the agent will just be paid by him either through a professional services agreement or as a seller/buyer rep for whoever they’re representing. If they’re just facilitating, the parties just need to have it in writing. If they’re representing you, it’s in writing. If they’re representing “them”, it’s in writing.

Anywho…we do double closings and it can be an issue with an FHA buyer, so check with their lender. I prefer assignments, but the wholesalers get nervous thinking we care how much they’re making.

He is not his agent since he is not party to the transaction. The issue the realtor will face is paying commission to non-licensed individual, but that can be worked around by paying him for his leg work to run around and do stuff.

Have the property conveyed into a land trust. This will help you avoid the seasoning

The issue sounds like seasoning and not who gets paid commission. The short sale was listed with an agent, so they’re paying his buyer’s agent or keeping it for themselves. We don’t really use land trusts here in TX, but we do double-closings a lot. Some title companies have a problem with it, but we don’t use them. As far as FHA, I do think it’s an issue and the buyer needs to go conventional.

Just check with the buyer’s lender or call a mortgage friend to see if there are any updates. I don’t sell to FHA folks since our properties are above the FHA limit anyway, so I don’t remember anymore.

When you complete the first closing, you will have taken title in your own name. Your buyer’s lender may require some period of time on title before they will give your buyer a loan to purchase your property. If the buyer is using an FHA loan, then you will probably need about six months on title since your selling price is more than 10% higher than your purchase price and you don’t appear to be doing any rehab to justify a higher price.

You have two options at this point, as I see it.

First, sell to a buyer that can pay cash or won’t need to use FHA financing, or any lender that will require title seasoning.

Second, let your buyer lease your property for six months or so and pay you a market rent. After you have at least six months on title, sell the property to your tenant. Assuming your buyer still wants to do FHA financing, title seasoning should not be an issue. Hopefully in six months the property will still appraise high enough that the lender will loan against your sale price.

Ok, so I did remember correctly. Dave is right. If you can’t help the buyer get a convention loan that doesn’t require seasoning, uou can also just do an assignment to the end buyer.

They may not like what they see if you got a great deal and sometimes the sellers put up a fuss.


Since we are talking about a short sale here, will a contract assignment work? If the the lender even allows an assignment, when the assignment fee appears on the HUD-1, won’t the lender see this as additional equity and increase the short sale price accordingly?

The best way to avoid seasoning is to have your buyer use a lender that doesn’t require it. Control your deal by having a couple of lenders lined up ahead of time that you can “recommend” your purchasers go to for financing.