Transactional funders typically cover 100% of what is “Due from Borrower” as shown on the settlement statement.
This should mean the investor would not have to bring any money at all to the closing.
However, as always there are exceptions to this industry standard for what transactional funding covers.
I have heard that certain transactional lenders will not fund any of the closing costs associated with the A-B closing.
These costs include all settlement fees and expenses listed on the second page of the settlement statements.
It is important that your contract with the seller and the end-buyer spell out exactly what closing costs should be paid by all parties to the transaction.
Some listing agents will tell you that their seller wants a specific closing agent, however, it’s very unlikely that the seller even knows the closing agent.
In these cases, the listing agent has a relationship with that particular closing agent, but you can request to choose your agent simply by paying for the title work.
The listing agent may object and even tell you it is the “law” that the seller chooses, but ANYTHING is negotiable and workable if done when the contract is signed, or later by an addendum.
Always tell the listing agent that your “Funding Partner” won’t close with that agent and ask how it can be worked out.
If there is no negotiating with the listing agent, next time make sure you have the choice before you sign the contract.
It is critical that you contact the closing agent so that he doesn’t disclose to the seller how much of a profit you are making on the sale of his property.
Just because you think your profit isn’t that large the listing agent or the seller, or the end-buyer may feel you are entitled to little or nothing.
If the seller or listing agent says they are canceling the contract, you have a problem that needs immediate action.
Don’t just threaten to sue the agent and the seller, get an attorney and quickly file a lawsuit (lis pendens) and stop the seller from selling to another party!
Keywords – what transactional funding covers, transactional funding basics, transactional funding costs
If you have any additional questions, contact me directly at [email protected].
If you need hard money instead of transactional funding, contact me for referrals to private hard money lenders.
Be sure to check out BestTransactionalFunding.com for all your same-day double closing needs, including a list of Investor-Friendly Closing Agents in various states.
We have more five-star Google ratings than all the other transactional funders combined.
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