What double closing instead of assigning actually does to a wholesaler's numbers

Question

Take a house under contract at $198k where the contract bars assignment without the seller's written consent, a clause easy to miss at signing, and no assigned buyer lined up. A common workaround suggested in these situations is a double close instead of an assignment, funded by the buyer's side, when a network contact has buyers willing to pay something like $215k. The mechanics change meaningfully between the two structures. Assigning produces a simple fee, the difference between the assignment price and what the buyer pays. Double closing means actually buying and reselling, which typically means paying closing costs on both transactions rather than one, so the net proceeds are the spread minus two sets of closing costs rather than a clean fee. Earnest money already sitting with a title company should generally stay in place and get addressed as part of the double close structure rather than pulled out mid-process, since disturbing it can jeopardize the original contract.

Rena Guide · Accepted Answer

Two different mechanics here, so the terms first. An assignment means you transfer your rights under the purchase contract to another buyer for a fee, the assignment fee, and you never take title. A double close means two separate closings, usually the same day. You buy from the seller on the first one and sell to your end buyer on the second, so title passes through you.

With a no-assignment clause you have two roads. Ask the seller for written consent to assign, which people skip because they assume it's a no and sometimes it isn't. Or double close, which the clause doesn't restrict because you're actually performing on the contract.

Yes, you pay closing costs twice. Your fee doesn't shrink in the sense that the $17k spread is still the spread, but the second set of costs comes out of it, often a couple thousand plus whatever the short-term funding costs, commonly a point or two of the purchase price with a minimum fee. So the number you keep is smaller than an assignment would have paid, and then you're splitting it with the member who brought the buyer.

Your earnest money isn't at risk from choosing between these two. It's at risk from the closing date. If the double close needs three weeks to arrange funding and your contract closes in twelve days, the deposit is what you lose. Get an extension in writing now, before the funding conversation.

One more piece worth raising with a local closing attorney rather than the group: several states have rules about disclosing that you intend to assign or resell, and what a non-licensee can be paid for, and those differ state to state.

jordan_ellis2 · Answer

I thought a double close needed two separate title companies, one for each leg. Maybe I read that wrong...

gregpowell66 · Answer

Pike, no, one closing agent can handle both legs if they are willing, and a lot of them are. Some flatly will not, or will not unless the second leg funds independently rather than using the C buyer's money to pay the A seller. Call before you pick the company. Escrow gets re-cut mid-deal when nobody asks that question first, and it is an entirely avoidable delay.

Rena Expert · Answer

Run the actual number before you agree to the split. $198k in, $215k out, $17k gross. Second-leg closing costs on a deal that size will commonly land somewhere around $2,500 to $4,000 depending on who pays what and your state's transfer tax, which varies a lot. Two points on $198k of one-day money is roughly $4,000, and funders usually have a floor fee, so it's rarely cheaper than that. You're looking at $9k to $10k net before you pay the member who brought the buyer. If his split is half, you're at $5k for a deal you sourced and locked up.

That's why the consent route is worth one phone call. If the seller signs off on an assignment, you keep most of the $17k minus your split and never take title. Sellers who are already at contract and just want to close often say yes.

The risk in what you've described that nobody's touched: on a double close you own that house between closings. If the C buyer's wire is late by a day, or his lender balks, you're the owner of a $198k property on borrowed money with no buyer. Ask which of the three buyers is cash and which is financed, and if any of them are financed, get the lender's position on same-day resale in writing. Ask also whether the funder's terms let you extend past one day and at what cost.

And get the split with the member in writing before he introduces you to anyone. A verbal 50/50 becomes a different number once he knows you have nowhere else to go.

What double closing instead of assigning actually does to a wholesaler's numbers

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