Double Close vs Simultaneous Close: What's the Difference?

What is a double close?

A double close is two separate closings on one property. In the first, the seller (A) sells to you (B). In the second, you sell to your end buyer (C). Each closing has its own settlement statement, its own deed and its own funds.

The defining feature is that the A–B purchase is fully paid for on its own. You use cash, or a transactional lender wires the purchase price. Axelrad's transactional funding covers 100% of the A–B price and is repaid from the B–C closing. The what is a double closing guide covers the basics.

What is a simultaneous close?

"Simultaneous close" is a looser term. Some people mean exactly the same thing as a double close, with both closings scheduled back to back. Others mean a structure where both closings happen at the same moment and the end buyer's money is used to pay the seller. That second version is sometimes called a "dry" closing or "using C's money to fund A–B."

The trouble with that second version is that the A–B closing is not independently funded. Its money is coming out of a transaction that has not technically closed yet. Some title companies, closing attorneys and end-buyer lenders will not allow it. Practices differ by company and by state, so you cannot assume the closer will go along.

Double close vs simultaneous close at a glance

Why does the difference matter?

Two reasons. First, your title company decides what it will close. If you plan a simultaneous close and find out on closing day that the closer will not disburse to the seller until the end buyer's funds have cleared a separate closing, you are out of time.

Second, financed end buyers. A buyer's mortgage lender typically wants its borrower to be buying from the person who owns the property. If you do not own it yet because your purchase depends on their money, that can be a problem for the lender. A funded double close avoids the question, because you are on title before the B–C closing begins.

A worked example

Example only, using the numbers on Axelrad's transactional page. You are buying at $200,000 and reselling at $230,000. You have paid $5,000 in earnest money.

• Funded double close: Axelrad wires $195,000 to title. A–B closes. B–C closes. Title repays $196,950 (the advance plus a 1-point fee of $1,950) from the end buyer's $230,000.
• Simultaneous close with C's funds: No funding fee, but the closer has to agree to use the end buyer's $230,000 to pay the seller before your purchase is complete. If they say no that morning, there is no backup.

The fee in the first version buys certainty. Whether that is worth it depends on your closer, your buyer and your margin.

How do you avoid confusion with your closer?

1. Say exactly what you mean: "two separate closings, A–B funded by a transactional lender."
2. Ask whether the title company or attorney closes double closes, and whether it allows one title company for both legs.
3. Tell them who is funding the A–B leg and when the wire will arrive.
4. If the end buyer is financing, ask their lender whether it has any seasoning requirement.
5. Get answers in writing before you set a closing date.

The double-closing checklist has the full list of questions.

Key takeaways

• "Double close" and "simultaneous close" are often used as synonyms, so define the term with your closer.
• A funded double close pays for the A–B purchase on its own.
• Using the end buyer's funds to pay the seller is restricted by some title companies and lenders.
• Financed end buyers fit more cleanly into a funded double close.
• Transactional funding exists to make the A–B leg independent.

Planning a same-day resale?

If you want the A–B leg funded on its own, submit your contracts to Axelrad and the team will walk through how it fits your deal. Current terms are on the transactional funding page.