simultaneous closing or back-to-back closing ). This process involves two contracts generally signed on the same day, sometimes with a mere 20 minutes between the closings. The first is the seller selling to you (the A-to-B transaction), in which your or your company’s name is put on the title. The second contract involves you selling to the buyer (the B- to-C transaction); the second transaction typically pays for the first, which means you don’t have to put any of your own money into purchasing the property. Because the attorney already has the money for the B-to-C transaction, it’s clear that the A-to-B transaction will happen, so the B-to-C typically takes place first. Neither party will know your profit, so this is the best option if you’d rather keep that private. However, there’s a downside — you’ll have to pay closing costs both when you buy it and sell it, so your total profit might be lower. There are a few important points to keep in mind with both types of transactions. First, if you’re a real estate agent, you often can’t assign the contract because you’re cutting out the broker. If you’re not an agent, you can put the deal together yourself and then hire an agent to do the work. The agent’s commission should be written into the contract. As for double closings, investors need to be careful. Depending on the mechanics, it might be that the investor is essentially doing what an agent would do, which could be viewed as illegal if the investor isn’t a licensed agent. It’s important that you’re clear on the laws of your state and that you bring in a licensed professional, if necessary. Finally, if a real estate agent is involved in either kind of transaction, they must disclose this. This is because, theoretically, there could be an unfair advantage.
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