Still a "double escrow/close" if i use my own funds up front?

Question

i'm working on a short sale situation in the southern california area. as i understand it, a double close (double escrow) is generally defined as two real estate transactions taking place back-to-back, on the same day, where the end-buyer's funds will be used to fund & close both transactions. now, given that, if i were to, instead, bring my own funds to the table to fund and close the first transaction, is it still legally considered a double escrow? the way i see it, no. any california escrow professionals out there? i'd love to hear your feedback. thank you, kindly. =]

Answer 1

You have gotten 2 slang terms and you are trying to get the difference.  A double close can be:  1st buyer closes and immediately records a deed to 2nd buyer.  That works fine because the seller is not involved and doesn't worry about anything going wrong. But there are 2 sets of fees by the title company.

or...  The 2nd buyer slips into 1st position and closes. This is legal because any realty contract can be "assigned".  Only 1 set of fees so that saves money.  But the seller is signing a deed to someone he's never met and never heard of.... and gets hesitant about signing it at all .So there is much confusions. Who is going to do all the explaining- you or the title people or ?

Either scenario is legal.

Lenders are putting wording in some "short sales" that you can no do what you plan to do.  They are already worried that they are being tricked into allowing a sale for too little money.  You have proved that their worry is correct.  Check the short sale documents... i bet there is a warning to you not to do this or the original seller may be liable./

Answer 2

You have it correct.  What you describe with you closing the first transaction, and then you closing a second transaction as the seller, is not a double closing.  It doesn't matter if you do this the same day or 10 years later.

The only thing you should be aware of is that if your buyer is getting certain types of mortgages (FHA, I believe but double-check), the lender may have seasoning requirements.  So they would not close the loan if you had just purchased it from the first seller the same day or anytime within their seasoning period.

Good luck.