On a double close, is the deed the defense or is the marketing trail the real question
Reading a double close file the way an examiner would is a useful exercise. A recorded deed into the wholesaler's entity and a deed out is the standard basis in several states for treating the operator as a principal rather than someone brokering another person's property. How any licensing statute applies to a given fact pattern is a question for an attorney in that state, not a general rule. The sequence is what deserves scrutiny. The deed exists at the end of the transaction. Weeks earlier, the property is often marketed to a buyer list with photos, an ARV estimate and a price, at a point when the only interest held is equitable under a contract. If a statute cares about marketing property one doesn't own, the deed at the end doesn't retroactively cure the advertisement at the start. If it cares about who holds title at the moment of sale, the earlier advertisement may be immaterial. The practical question for a careful operator is what to change given that ambiguity. One approach is to take title and treat the ownership as the governing fact. Another is to treat the paperwork protection as only as strong as the marketing that preceded it, marketing buying capacity generally rather than a specific house until title is held. Both approaches cost something, and the second one slows buyer matching, which is often how an operator learns whether the deal works at all.
Which part of a double close do you think carries the real exposure?
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