Why is a "Double-Closing Illegal? And what is the difference

Why are they Illegal and what is the difference between a “Double” closing and a “Simultaneous” closing??? :bash

wow 31 views and no one knows? Any input would help guys! :help

To my knowledge, they are not illegal.

A double close is when you close one transaction and, once it’s completed, you close the second. I’ve also seen it called a back-to-back closing.

A simultaneous closing is where the two closings are kind of lumped together and funds from one are used directly against the next. The closings happen simultaneously, thus the name.

It’s possible that no one answered because this has been answered dozens of times before and people might have thought that you would have done a simple search for your answer.


Technically, there is noting illegal about a double closing (using new buyers funds from second to purchase property in first closing). I think that due to the credit environment, you may have trouble with the lenders of your end buyers wanting seasoning, which would make it impossible to do the traditional “double-closing” as normally defined by RE investors.

You have to find a title company that understands the process, but be aware that banks are having to do more documentation in order to fund your buyers. You probably have to have done some kind of improvement comensurate to the new asking price for a lender to feel that all is on the up and up.

I have never done a “double” closing, but only a “back-to-back” closing. In my case, my client fully funded purchase with their own money and closed escrow with recorded title, then 24 hours later, closed on the end-buyer’s escrow. So technically different from the example above.

I talked to ten title companies about simultaneous closings and assignment of contracts and only two got it. I was told it was illegal by one too. Just keep calling title co. and or attorneys until you find the right person.

One title co. said they don’t do assignments and right in their purchase agreement in their FSBO package online, there was a paragraph that said “This contract is not assignable without sellers written permission.”
To me, that means it IS assignable with permission which would be an assignment!
Call someone else and ask around at your local REIA to find people who are doing these type of closings in your area.


HEY and hi every one
Have been off for a while with family stuff and realestate stuff

Okay any time a title company a realtor or a lawyer do not understand something // or have never done it

:shocked WOW WOW it it must be against the law

Hey wake up just because you have not done a thing is not to say it is or has broken any law !!

I will give you a story i just was part of
I have a realtor who is a bird dog for me and my company
He is in a far part of Oregon
i told him look for some preforeclusers // folks with high DTI S
And we will do may be some SUB - 2
He right away said no i will not as this is against the law and would be screwing over the seller and i will not be part of it

and then he went down his long list of BS due - on -sale ect ect

Well he ending up giving me a name of a person wantting to sell but not wantting to pay a realtor to sell it
In talking with this person he was a perfect person as i saw it for a SUB - 2 he had just lost his job was now 2 payments behind and wanted something done fast !

I now have a deal done and signed with him he has moved on
Startting a new job in a biger town and i bought his home SUB - 2
And i have a renter in the home making the payments to a lawyers office /trust and i am making 150 cash per month at this point

AND oh my bird dog realtor i paid him 100 bucks for the information as well the selling gave him a 50 dollar thank you
AND i gave him the name of the lawyers office / trust
He looked over the papers


So just hang in there all of you whom are getting the crap on the deals with title compines and the like once you get one done and show them it is a differant world




I am a REALTOR in MI, I know. Isnt that against the law?

As far as I know the double close is NOT illegal. No one has shown me the law that states you cannot do this.

If it’s not, perhaps it should be!



:cool Keith what is it you think should be against the law a double close ?

No, it should be against the law to be a Realtor in Michigan!

But it was a joke…OK?

                     OKAY   LOL

Doing a guru simo closing (use funds of 2nd closing to pay for 1st closing) may indeed by illegal in certain states. With many cracking down on “creative” financing techniques, I’d never say that it wasn’t illegal. Check your state laws!

Also, regardless of their legality in your state, performing them as such would have severe consequences should an “oops” occur in the process. What happens when you close on the 2nd and the 1st doesn’t close? What happens if there is a problem with the 2nd, and you can’t close on the 1st? Not just what happens with you and the seller/buyer of the deals, but the closing agent as well?

Title companies, and especially, attorneys, have to account for those funds. If they aren’t there when they should be, guess who is responsible? The closing agent. Most won’t do them simply because of that fact. However, it’s much worse. One problem simo closing and there whole business could be shut down. Hardly worth the money, I’d guess.

And your Realtor friend, if he is representing these people at all, then he is violating his code of ethics which basically says that he will not recommend anyone to violate any agreements that they have made (ie, a due on sale clause in a contract) in order to sale a property. Since he is getting paid, I’d wager that a review board would say that he is violation. Just an FYI.


This is one of the myths of this industry, spread by even some title agents unfortunately. Now, in your particular state they mat have in fact made it illegal, but not the way you think. This is similar to the many knucklehead real estate agents telling you that flipping properties is illegal. It has to do with some states not liking the funding of one. But the concept of a double close is not illegal or unethical, it usually has to do with the lender wanting complete disclosure of whats happening. Same with the “Flipping” of properties. Thats the american way, by something at a discount and then sell it for more.

The first real estate transaction I did, I had an option to the property, but was not on title. I got it under contract from the seller to me. Then listed and got it under contract to a different seller. A typical double close. The lender had issues with me not being on title (obviously) and selling the house. I completely disclosed what was going on and the lender still didn’t like it. I told their lender to make it a prior to funding condition, which means we would all go close (sign papers) on the transaction, then before the lender funded it, they would review the title and see it was right, and then fund it. The lender did not want to do that. So I had the person selling it go in and close, which put me on title, and the very next day closed part two of the transaction, and everything was fine. The funding of it was fine because I was on title, but before i can be paid for selling my house, the liens have to be satisfied. So we satisfy the lien (payoff the mortgage company) and I get the rest. Very simple!! Was it a double close still? Basically, but because I understood that simple thing about title, it technically wasn’t. This issue is not as big of a deal as everyone makes it out to be, because most people do not understand how title works. Go find a good title agent who understands this stuff, or lender, or if you are very lucky, a RE agent who gets it (good luck), and figure it out. This land trust stuff may work, but all it is is just smoke and mirrors, and is a scary substitute for full disclosure. The only reason it is not being cracked down on is because our states do not have the man power to go after it yet. They have bigger fish to fry. Lenders do not have title or seasoning issues (generally) on purchase money as long as it makes sense (no fraud). Alot of this seasoning crap everyone is talking about is on refinances, because of equity stripping (fraud). If the value is there and the collateral makes sense, then you are usually ok. A cash out refi is a different story, because of obvious reasons. But even a rate/term refi is usually ok.


HELLO ROGER J you need to reread my post on this matter all my realtor friend did was tell me of the person /// he was in no way the realtor for any party in the deal

Second my giving him some cash was just for his telling me about the person need the help

As well the seller giving him some cash was just him saying thank you
It was just a friend helpping a friend form both ends

No breaking of any laws

I do understand the laws in some states do not want any one but a realtor to make any money in a realestate deal but hey this is just not going to be the case every where and even in the states that want this

Why dont they just start telling people you can not do any more of the FSBO owners as you are not a realtor WRONG THIS IS THE GOOD OLE U.S.A.

If i want to sell my house with out any realtor in it i can do it >>>> and how i do it is of nobodys business but me the seller /buyer and my lawyer

Iam sure there are many whom thing just as i do on this ?

RE 001,

Depending on your state’s RE commission rules/laws, your agent friend may or may not be representing the person. Don’t know the state or exactly what was going on. Alot would depend on that as well. That said, if he accepted payment of any kind, then in most cases, a review board would consider that payment for services, in which case, his duties as an agent would come into play. And I never said anyone was breaking laws. I said that it would possibly be an ethics code violation for him. Again, just sharing for an FYI. Thought he may want to review his policies just to make sure.



THANK YOU for your thoughts on matters all are welcome this is why we are the U. S . A.

wow pretty good answers. thanks guys. I didn’t disclose that im licensed too.

so should i do an simultaneous close than since Double-closings are questionable (is what i’m getting?)

I’m in New Mexico.


You should check and see wat your laws are first

Then you should move from there as well know /find out how much you can be the so to speak person on both sides

But if you have a person whom has a proerty they want but can not afford and just want to flip it

You should allso check the laws on title of property ( seasonning )

I know this sounds like aforest thing of Run but you need to get on one side of the deal or the other
And with you being who and what you are this adds a new twist to the deal

This is a great post, I have my first double close at the end of this month and the lender’s appraiser did ask the question of seller not being on the current title. I disclosed all the info to him and he said the bank shouldn’t have a problem, as long as it’s all disclosed. I will keep you all posted.

Skersey, when you say you spoke to the lender, who is the exact contact person you’re referring to? It seems as though they were very responsive, and it would the rest of us to also know who this contact is. And I’m assuming you closed the first deal with all cash, then closed the next day with the end buyer’s mortgage.

OK sorry that was a little misleading. I didn’t talk directly to the lender, it was through the buyer’s RE agent, but I was essentially talking to the underwriter, who is the one making the decisions. I understand what they are thinking about and so I can speak their language a little even if it’s through a knucklehead (as this RE agent was).

As far as closing with cash…No! It’s called seller financing! Seller financing deals happen all day every day all over the place and the buyers do not have to bring funds in to be put on title. IF YOU ARE ON TITLE YOU HAVE THE RIGHT TO SELL THE PROPERTY. Simple. When a property sells, the liens are satisfied first, and the remainder of the money goes to whoever is on title. Very simple. This is the same thing that is happening with a land trust, with the notice of option being filed (which I really like), etc. Same result, just disclosed differently. I hope that makes sense, if not, let me know and i’d be happy to explain it in a different way.