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Waiting on a funder's term sheet and my title company wants to know the end buyer's name before they'll schedule anything

I don't have an end buyer yet. That's the whole thing I'm sitting with right now. Found a property in Akron, seller under contract at 74k, I have what looks like a 94k end buyer range based on comps in that zip. So the spread pencils out at maybe 20k before costs. Transactional funding on 74k for 48 hours is probably 1,480 to 2,200 based on the quotes I've been reading, two sets of closing costs probably eat another 2,600 to 3,400 combined, and I haven't even gotten to title insurance on both legs. Call it 5k in friction costs on the outside, which still leaves 15k if everything goes right. I understand that math. What I don't have figured out is the sequencing problem. The funder's term sheet requires me to show proof of the end buyer before they'll commit capital, and the title company won't open the file without knowing who closes the second leg. But I don't want to go lock in an end buyer and burn the relationship if the funder passes or title says no to the structure. So right now I have a contract, a spread that works on paper, and two gatekeepers each waiting on the other one to move first. Trying to figure out which of these you crack open before the other, because right now I'm just holding a signed contract and a phone.

2 replies

The sequencing problem is real, but the assumption doing the most work is that you need a committed end buyer. You probably need a qualified lead with a soft confirmation, which is a different thing.

Most transactional funders I'm aware of accept a signed purchase agreement from your end buyer, so what they want is a name attached to a contract, not a closed deal. That means you can go to a buyer in your network, present the property at 94k or wherever you price it, get a signed agreement with a closing date contingent on your ability to close the A-to-B leg, and use that document to satisfy the funder's proof requirement. The buyer knows the deal is pending. You have not burned the relationship because you disclosed the contingency rather than pretending the deal was certain.

The title company problem usually resolves the same way. They want a name and a contract number for the B-to-C leg to schedule and open the file. A signed agreement with a reasonable closing date gives them what they need to proceed. Confirm with your specific title company what they will accept for scheduling purposes, because some want a fully executed contract and some will work from a term sheet. Get that in writing.

The risk you did not mention is your contract clock. If your purchase agreement with the seller has an inspection or closing deadline, you may be burning days while the two gatekeepers wait on each other. Check how much runway you have before any deadline triggers, and whether you have an extension clause you can use if the sequencing takes longer than expected.

On the Oklahoma point, confirm with a local real estate attorney whether any disclosure requirement applies to your spread at closing. That is a licensed-professional question and I will stop there.

What does your current contract say about the closing deadline, and do you have an extension option in the agreement?

The framing of "which gatekeeper do I crack first" is the wrong question entirely. Both of them are telling you they need something before they'll move, and you're treating that as a hard wall when it's actually just their default posture with someone they don't know yet. The funder's proof-of-end-buyer requirement and the title company's need-a-name requirement both soften the second you have an existing relationship with either one. I ran a double close in Canton two years ago, similar numbers, and my transactional funder didn't need a signed purchase agreement from the end buyer. They needed a letter of intent and a text chain I forwarded. That's it. My title company opened the file with "TBD buyer" in the second leg because I'd closed four deals there before and they knew I wasn't wasting their time. You are starting cold with both of them simultaneously, which is why you're getting their most conservative version of the process.

What I'd actually do is drop the Akron deal for 72 hours and spend that time getting one of the two relationships to a warmer temperature before you need them. Call three transactional funders who actively do Ohio deals, not quote aggregators but actual funders, and have a general conversation about their process before you mention this specific contract. Then go find a title company that has already closed a double close in Summit County in the last 18 months and open a hypothetical conversation. You are not burning an end buyer relationship by shopping the deal before you have your infrastructure locked. You're burning money by holding a ticking contract while trying to solve a trust problem with people who don't know you yet. The math on 74k to 94k is fine. The problem is you're trying to use the deal to build the infrastructure instead of building the infrastructure first, and that order is backwards.

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