Does a simultaneous close actually exist or is it just what title companies call it when they're being loose

Question

I've had two closers use "simultaneous close" and "dry close" to mean different things and I want to nail the definition before I structure anything.

Closer one told me simultaneous means both deeds sign and record the same day, but the A to B leg is still funded with my transactional money, which then gets repaid an hour later. Closer two said simultaneous specifically means the C buyer's wire funds both legs, so no third party money touches it at all, and that's what makes it dry.

Those are materially different. In version one I pay 2 points. In version two I pay nothing but I'm depending on a title company willing to disburse the C funds into the A closing.

My actual problem: I have a deal at 240k to 268k and the difference between the two structures is about 5,600. Which one is the real definition, and does the second one still get done or did underwriters kill it?

Rena Expert · Accepted Answer

Strictly, the dry close or simultaneous close is closer two's version: the end buyer's funds cover both legs, so you bring nothing to the table. Closer one is describing a same day double close that happens to be funded, which is the common loose usage. Most of the industry uses the terms interchangeably and you'll have to ask each title company what they actually mean before you rely on it.

Whether the dry version is available to you is not a definitional question, it's a question about that specific title company and its underwriter. Many underwriters will not permit C funds to be used to fund the A closing, because for the moment before the A deed records, the C buyer's money is sitting in escrow against a property their seller doesn't own yet. Some underwriters allow it with a same day recording gap indemnity, some allow it only if the C buyer is cash, and some refuse outright. Practice varies by state and by underwriter within a state, and it changes, so confirm in writing with the specific escrow officer who'd be handling your file.

On your 5,600: if the dry structure is available, take it, but build the funded version into your timeline as the fallback and get a transactional funder pre-approved anyway. The failure mode is finding out four days before closing that the underwriter said no, and then scrambling for 240k of same day money at whatever price you can get.

Also confirm how your C buyer is financing. If they're using a conventional or DSCR lender rather than cash, that lender will have its own seasoning view on you having owned the property for zero days, and that kills more double closes than title underwriters do.

joe_delgado5 · Answer

The seasoning point at the end is the one that matters. I've had a buyer's lender come back at the eleventh hour asking for chain of title documentation because their underwriter flagged a same day resale as a flip. Cash buyers or buyers using a hard money lender who already knows the structure, otherwise you're gambling on an underwriter you've never spoken to.

Also on your terminology thing, I've stopped asking title companies whether they do simultaneous closes and started asking whether they'll disburse C funds into the A leg. Plain question, one answer, no vocabulary argument.

Does a simultaneous close actually exist or is it just what title companies call it when they're being loose

2 replies