Double closing
A double closing is two separate transactions completing in sequence. The investor buys the property from the seller, then immediately resells it to an end buyer — frequently the same day.
It is the alternative to assigning a purchase contract.
Why choose it over an assignment#
The spread is visible in an assignment. An assignment fee appears on the settlement statement, and a large one prompts questions from a seller who did not expect it.
A double closing puts the two transactions in separate files. The seller sees what they agreed to sell for; the end buyer sees what they agreed to pay.
Some contracts prohibit assignment, which leaves a double closing as the only route.
Some end buyers' lenders are uncomfortable financing an assigned contract, which pushes the transaction into this structure.
What it costs#
Two sets of closing costs. Title work, recording fees, and in Minnesota two deed tax charges — 0.0033 of net consideration on each conveyance, plus the additional ERF component in Hennepin and Ramsey.
Funding for the first purchase, even if only for hours. Transactional funding exists for exactly this and prices accordingly.
Some title companies will structure the closings so the second sale's funds complete the first. Many will not, and it is a question to settle with the closer well before the date rather than on the morning.
The disclosure question#
The structure is lawful. The friction is about what the seller knew.
A seller who discovers their house was resold the same afternoon for substantially more has learned something material at the point of least leverage, and that discovery is where complaints and occasionally litigation come from.
Choosing a double closing specifically to keep the spread invisible is a commercial decision, and it is worth being clear-eyed that it is one.
In Minnesota distressed property#
Where the seller is a homeowner in foreclosure, the transaction may fall within Minn. Stat. ch. 325N, which regulates foreclosure purchasers, imposes a five-business-day cancellation right and makes waiver of its protections void.
A structure designed to obscure the economics from a homeowner in foreclosure is precisely the pattern that chapter was enacted to address.
Any homeowner approached should speak to a HUD-approved housing counsellor before signing. The advice is free and is not attached to a transaction.
The title company decides whether it works#
Not the investor, and this is the step that determines feasibility.
Some closers will run both transactions and permit the second sale's funds to complete the first. Others require the first purchase to be independently funded and will not sequence them.
Some decline the structure entirely, on the view that they will not insure two same-day conveyances at materially different prices.
That is a question to settle before contracting, not in the week of closing. Ask the closer directly whether they will handle a same-day resale, on what terms, and what funding they require for the first leg.
An investor who assembles a deal and then discovers no local title company will close it has a contract they cannot perform.