The Real Cost of a Double Close: Funding Fees, Points and the Costs People Miss

Wholesalers tend to focus on the funding fee. On most double closes, the closing costs on the two sales matter just as much. Here is every cost category to put on your deal sheet before you choose a double close over an assignment.

A quick definition: a double close (or A-B-C close) is two sales of the same property. The seller (A) sells to you (B), then you sell to your end buyer (C). Transactional funding, sometimes called flash funding, is the short-term loan that pays for the A-B purchase and is repaid from the B-C closing.

What does the transactional funding fee cost?

At Axelrad, transactional funding starts at 1 point on the standard double close. A point is 1% of the amount advanced. Gap transactional deals, where the funding covers cash to close on a seller-financed or stacked purchase, start at 2.5%. A double close is priced with points or a flat fee, not both.

How the fee is paid matters as much as the rate:

• No upfront fees. Nothing is due before closing.
• The fee is paid at repayment, out of the B-C closing, and is not withheld from the advance.
• Nothing is payable at all if the deal does not fund.
• Deals over $1 million are priced on a call with our team.

What are the other costs of a double close?

Because a double close is two real sales, most closing costs happen twice. You pay closing costs on both transactions, including two title insurance premiums, two sets of settlement fees and applicable transfer taxes.

Who pays what on each closing is negotiated in your contracts and shaped by local custom, so get a fee estimate from your title company for both files early.

What hidden costs should you ask about?

"Hidden" usually means "not asked about." Before you commit, ask the funder and title company directly:

1. Processing, wire or document fees. Some lenders add these on top of the headline rate. Axelrad charges no upfront or junk fees.
2. Extension terms. What happens, and what it costs, if the end buyer's money arrives a day late? Axelrad has delayed and extended options; terms depend on the deal, so call us before closing day.
3. A-B closing costs. Are they included in the advance or due from you at the A-B closing? On our published calculator, your cash covers A-B closing costs unless the advance is set to include them.
4. Title's double-close charges. Some title companies price a back-to-back closing differently from two ordinary sales. Ask for both estimates in writing.
5. Cancellation. What do you owe if the deal never funds? At Axelrad, nothing.

What does it all add up to?

Here is the worked example on Axelrad's transactional page. These are example figures, not a quote.

The same calculator shows a break-even resale price of $207,450 in this example. Below that, the deal loses money after costs. Run your own numbers on the transactional page calculator, or compare against an assignment with the assignment vs. double close calculator.

How do you keep double close costs down?

• Get title estimates for both closings before you sign the B-C contract.
• Use one title company for both legs when it makes the timing easier, and ask if they price back-to-back files differently.
• Choose a funder with no upfront fees, so a dead deal costs you nothing.
• Verify the end buyer's funds early, so you never need an extension.
• If an assignment is allowed and the fee being visible is not a problem, compare the net. It often costs less.

For how to compare flat-fee and percentage quotes, see transactional funding costs: flat fees vs. percentages.

Key takeaways

• A double close costs the funding fee plus two full sets of closing costs.
• Axelrad's transactional funding starts at 1 point, paid from the B-C closing, with no upfront fees.
• Title insurance, settlement fees, recording and transfer taxes can apply to both sales.
• Ask about processing fees, extension terms and who pays A-B closing costs before you commit.
• Know your break-even resale price before you sign the B-C contract.

Talk to Axelrad

Want your double close priced in dollars before you commit? Send both contracts through Axelrad's application, and see transactional funding for current terms.