Lost my earnest money because I assumed the end buyer's cash could pay for both closings

The part I want to understand better is the sequencing. Your 5,000 went hard at the end of the inspection period, and you were still guessing about how the first closing would be funded at that point? I ask because I do the same thing in my head, I treat the money question as something to settle later because it feels like the easy part.

Closing agent policy is the whole thing here and it isn't consistent. I've sat in on files with two different settlement companies in the same metro, one does back to back all day, the other's underwriter forbids it outright. Nobody advertises which one they are. You have to ask, and the answer you want in writing is specifically about disbursing the resale funds into the purchase file, not a general "yes we do double closings."

The 640 inspection you bought to look serious is the line that stuck with me. That was a real cost with no job to do.

The simultaneous or dry close depends on one thing: whether the settlement agent will use money from the resale file to fund the purchase file. Some agents do it routinely, some will not touch it under any circumstances, and some will only do it with the end buyer's lender consenting in writing. Underwriter policy and state escrow rules both drive that, so the answer varies by state and often by individual office. Ask before you commit, and get it in an email.

Transactional funders look hardest at the resale. They are being repaid out of the second closing, so the end buyer's contract and ability to perform is what they underwrite. A financing contingency on the resale side with a lender who won't confirm anything is usually what stops a quote, which matches what you ran into.

On the economics, your 27k spread had to absorb two sets of settlement charges, recording fees at both closings, and transfer tax that in a number of states is charged on each deed rather than once. Add funding points and a doc fee. That is the standing tradeoff against assignment, where the fee arrives without the second set of costs. Confirm the actual fee schedule with the closer and the funder in writing before you price the spread, because those numbers move.

One more thing on the reason you chose the structure. Whether taking title changes your position under your state's brokerage licensing rules is a question about how that specific statute applies, and it does differ by state, so put it to a licensed attorney where the property sits rather than working from what you read. The privacy motive and the licensing motive are separate reasons people use this structure, and only one of them saves the deal you described.

Worth adding to the cost list: in states that tax each deed, you pay transfer tax twice on a double close. On 91k in and 118k out that can be real money depending on the rate, and I've watched people discover it at the table. Check your state's rate and who customarily pays before you decide the spread is fat.

Almost the same near miss on a duplex two years ago. The closer said yes on the phone. Then her compliance department said no eleven days later. I got saved by an end buyer who happened to be all cash and agreed to close the whole thing in one file at my price with a separate agreement, which is not a thing I could repeat on demand. You didn't do anything unusual, quill, you just didn't get the yes in writing from the person who actually decides.

Slow question because I don't want to nod along and stay confused. When people say dry close, they mean the wholesaler brings no money and the end buyer's wire covers both deeds on the same day? And the "closer" is the settlement company or attorney handling escrow, not a person on my team? I'd assumed dry close was the default version of a double close and the funding was the unusual version.

I had this exact assumption sitting in my notes as a fact after months of reading. Deleted.

I'd put the cause somewhere else. The closer's policy was a wall, sure, but the reason you couldn't get around it was a resale contract with a financing contingency and a lender who wouldn't talk. If your end buyer had been cash you'd have had two funders competing and probably closed. The lesson I'm taking isn't about title companies at all.

windlass has it closer to right than the rest of the thread. My rule since a deal died on me last spring: I talk to the end buyer's lender myself before I go hard with the seller. If the buyer won't put me on the phone with whoever is funding him, he's not a buyer yet, he's a maybe. Costs one call.

Underwrite it as an assignment first. If the deal only works when the spread stays hidden, the deal is thinner than you think, because the double close costs you two settlements and the funding and you should be subtracting all of that at the front. 27k minus roughly 3k of extra settlement and tax and roughly 3.3k of funding is 20.7k, and the assignment version was 27k with one file to coordinate. That comparison decides which road you take, not how the number looks to a buyer.

27k wouldn't scare any buyer I sell to. My people know what I make and they buy anyway because they don't want to talk to sellers. I've stopped assuming the fee is the objection. Half the time the objection is the condition of the roof and the fee is just what they say out loud.

Is earnest money always non refundable after the inspection period, or was that specific to how quill's contract was written? Everything is new to me and I don't know which parts are the contract and which parts are the law.

rigging, from what I've been told it's how the contract is written, and the contingency deadlines in it are what turn the deposit hard. Mine also varies by which form the state association uses. Somebody correct me if that's off.

quill, thanks for posting the actual number. I've read maybe forty explanations of double closing and not one of them mentioned that the settlement company gets a vote.

I keep two funders pre-approved with current docs on file and it costs nothing to sit there. Both quotes expire and get refreshed every quarter or so. The reason isn't that I plan to use them, it's that a closer saying no stops being an emergency.

parcel's second point is the one I hadn't thought about. An extension you already hold versus one you have to ask for is a completely different negotiating position, and it costs nothing at signing.

Inspection on a wholesale flip is fine if you're using it to price the scope for your buyer. Ordering one to look diligent is how you end up with a 640 line item and a report nobody reads. I've done the equivalent, paid an engineer for a letter I never sent anyone.

Adding to my what-the-first-deal-actually-costs sheet: hard earnest money, funder doc fee, second settlement, transfer tax possibly twice. My sheet had "assignment fee: profit" and nothing else on it a month ago.

How do people find the closers who will do these? Do you just call every title company in the county and ask, or is there a less annoying way? I'm still building my list and I'd rather have that name before I ever have a contract.

bramble, ask the active buyers in your market who they close with. The ones buying five houses a year already know which office says yes.

On the funding side, quill's experience matches what I hear from people who write these checks. They are repaid entirely out of the second closing, so a shaky end buyer means no quote at any price. The points aren't the gate.

Why did your 118k buyer need a lender at all? At that price most of the guys I work for on the construction side are paying cash or using a hard money line they already have open. A buyer at 118k who can't produce proof of funds inside a week is telling you something.

Reading this I'm wondering whether double closing is just a bad first structure for someone with no capital and no relationships. Everything in this thread that saved somebody was a relationship, the closer who says yes, the funder on file, the buyer whose lender picks up the phone. quill had none of that yet and neither do I.

The third funder refusing to quote under 100k is normal in my price band and it's brutal. Most of my deals are 60k to 90k houses and the minimums plus the flat doc fees make the math ugly. I've mostly stopped double closing out here and use my own cash when I do it, which caps me at one at a time.

quill, did the seller's backup offer turn out to be real? I've been told twice that there was a backup and both times the house sat for another six weeks. Not that it changes your outcome, I'm just trying to learn how to read that claim.

I'm here for income without a second job and this thread is a decent argument that this particular activity is very much a job.

On the funding quotes, get the fee structure in writing including anything payable on a commitment that doesn't close. Some short term lenders charge a commitment or underwriting fee up front that you don't get back if the deal dies, and if quill had paid one on top of the earnest money the number would be worse. Terms move around, so confirm the current schedule with the specific lender rather than working from what somebody quoted last year.

There are people who coordinate these files for a fee, and after reading this thread I understand what they're actually selling, which is knowing which office says yes and having the funder's docs already on hand. That's a service business.

quill, what did your resale contract say about assignment and about your right to extend? If it allowed you to assign, you had a second road out when the closer said no, and you could have handed the contract to the buyer's lender's borrower directly at your fee. If it was silent on assignment and had a hard closing date tied to your seller's deadline, then the day the closer refused, the deal was already finished and the extension request was the only card left. I read a lot of these and the assignment language is usually the clause nobody looked at.

The version of this that works is boring. One closing, a fee you show, a buyer with money. Thanks for writing it up honestly.