They don’t have to be in attendance at the same time. A double-close doesn’t have to be back-to-back; it could take a couple of days. You’ll need a settlement agent that understands the process.
Ordinarily, you would not want the seller and your new buyer to get together. When they compare notes, the seller will feel that he sold too cheaply, and an unsophisticated buyer will feel that you are an added layer of expense and are getting paid for no value-added to the transaction.
When you buy a foreclosure for the purpose of fixing it up and putting on the market, a number of things need to be done including:
inspecting the property
calculating repair cost
Title search
etc., etc.
When flipping a contract, is it the the person you flip the contract to’s job to do these things? Between the “flipper” and the “flipee” whose responsible for what?
I like to maintain control over the deal. So I’m starting to run title, negotiate any liens or judgments that need to be discounted, then call my assignee to sell the deal. I’m insisting that they use my title (and survey, if necessary) and be ready to close in 3-5 days.
When you flip a contract by assignment, the flipee is taking over responsibility for everything because they are stepping into your shoes. As Tom said, usually the flipee would do their own inspection and repair estimates before accepting your contract. You will have to know these expenses to buy at a fair price, and to establish a value for the assignment fee you are going to charge the flipee. If you are doing a double-close, as flipper, you are guaranteeing title to the new buyer, so it?s a good idea to check title and maybe get a title insurance binder prior to purchase.
Re: I’m taking a different approach. - Posted by Kristine-CA
Posted by Kristine-CA on April 09, 2004 at 01:49:55:
IB(NJ): I don’t call buyers or market properties anymore until my purchase contract is in escrow and I’ve seen a title report. I’ve learned the hard way that there are too many variables. One being title, the other being whether or not people are really ready to sell.
All buyers have to use my escrow company, and they have to accept that the title insurance is coming from them as well, because that’s where I bought a binder on the first title policy issued in my buying escrow. I’ve never had anyone complain, although some investors have preferences for their own escrow people. I’m now using someone that many of my buyers have worked with before so it’s not a problem
Learning to control the deal has taken me a long time, and I still have a ways to go. kristine
Posted by Kristine-CA on April 08, 2004 at 22:57:43:
Victor: It’s two escrows–one from the buyer to you, and one from you to the seller. The purpose being to use your buyers funds to fund your purchase (and then get the difference as your profit on the deal).
You can read about double closes in the archives. It’s a wealth on information on this topic. Search flipping, simultaneous close, double close. It’s endless. Kristine