When investors choose it over an assignment
Three situations push a deal toward a double close. The spread is large enough that showing it on a settlement statement would blow up the transaction. The purchase contract prohibits assignment, or the seller is an institution — a bank selling REO, an agency, a relocation company — whose addenda ban it outright. Or the end buyer’s lender will not fund a deal where the seller has owned the property for zero days and holds no title of record. Closing the first transaction fixes that last problem by putting you in the chain of title, though some lenders impose their own seasoning requirements regardless.
How it is funded
The first closing needs real money even if it exists only for an afternoon. Options are your own cash, a short-term transactional funding provider that lends for a day or two against the simultaneous resale, or a hard-money lender willing to write a very short note. Transactional funders typically charge a flat fee or a percentage and require evidence that the second closing is genuinely ready — signed contract, buyer’s funds verified, both files at the same closing agent. Some title companies will not facilitate the structure at all, which is why you confirm before you commit.
Costs, timing, and the title company
You pay closing costs twice — title fees, recording, transfer taxes where they apply — and transfer taxes alone can make the structure uneconomic in certain states. Timing has to be tight, because a delay on the second closing leaves you owning a property you did not plan to own with funding that is due. Choose a closing agent who has done this before, disclose what your state requires you to disclose, and treat the legal question as jurisdiction-specific rather than settled: rules around wholesaling and same-day resales have been tightening in a number of states.
Deciding between the two
Compare the structures on cost and exposure rather than on preference. An assignment is cheaper, faster, and leaves you out of the chain of title, which also means you never take on the property’s liabilities. A double close costs two sets of fees and briefly makes you the owner, with everything that implies if the second closing does not happen. Most experienced wholesalers assign by default and reserve the double close for the specific situations that require it, disclosing whatever their state expects either way.
Related terms
- Assignment of contract — Selling your position in a purchase contract to another buyer instead of closing on the property yourself.
- Wholesaling — Putting a property under contract below market and transferring that contract to an end buyer for a fee, without ever owning it.
- Escrow — A neutral third party holding money or documents until both sides satisfy the conditions of a deal.
- Title insurance — A one-time-premium policy protecting against defects in a property’s ownership history — forged deeds, missed heirs, unpaid liens, recording errors.
- Earnest money — The good-faith deposit a buyer puts up when a contract is signed, held by a neutral third party and credited toward the purchase at closing.