The resistance to doing double closings is mostly because investors don’t want to pay any closing costs.
Saving On Double Closing Costs
- In the assignment or sale of a contract, the amount of the Assignment Fee or Sales Price is a net profit to the investor.
- However, with a double closing, the investor may have to pay closing costs on the purchase and the sale of the property.
- I suggest if the investor’s profit is less than $10,000, he tries to assign his contract to save closing costs.
- However, if the seller, end-buyer, closing agent, state regulations, or for other reasons he can’t assign or sell his contract, he will have to double close to complete his deal.
- Too often the investor has the seller sign an Assignment Contract but a day or two before the closing, the closing agent, the seller, or the buyer, will not allow the assignment.
- The investor must now have the seller sign a new purchase and sale contract to close and do a double closing.
- To both increase your profits and to be able to do a double closing, you should ask your original seller and your end-buyer to pay your closing costs.
- When I’ve offered this as a solution to investors who focus on double closings, I often get, “The Seller / End-buyer will never do that!!”
- If phrased properly, you get either or both parties to pay some or all of your closing costs.
- I can guarantee that if you don’t ask you will not get any concession from either party!
- To help both the seller and the end-buyer, you start by asking them for “Help”.
- When asked what you mean, you simply say that you agree to their price, but you realize that you offered too much or sold too low and you need “some help”.
- Go on to explain that “typically” your seller or end-buyer pays your closing costs – say nothing, the first to speak loses!
- If either one says, “No,” ask to split the costs.
- If either party asks how much they are then answer, “Usually 1% of the purchase” and say nothing.
- If neither party agrees to give you any “help”, at least you’ve tried.
- As you get more proficient in asking or putting a clause in your initial contract to them, you will substantially increase your net profits for the year and start saving on your double closing costs.
If you have any additional questions, contact me directly at DaveDinkelQuestions@gmail.com.
If you need hard money instead of transactional funding, contact me for referrals to private hard money lenders.
Be sure to check out BestTransactionalFunding for all your same-day double closing needs, including a list of Investor-Friendly Closing Agents in various states.
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