Double Escrow Closing?Legal In CA?
I came across a sweet deal I think! The owner is well aware of the property values in our town. He does not want to lift a finger to brush away even the cob webs. He wants $250k for this outdated 1970's structually sound! home across the street -much smaller, nothing fancy just sold for $309k, another home down the street is pending for $312k. We just filled out purchase agreemant and ready to open escrow on monday. I placed ad in paper "Must sell, Homes in area going for above $300k, I'm asking $290 for mine, very nice area, call me" Can I do this? I recieved two calls and I am stalling them until I officially open escrow. Once I do open escrow can I seek a buyer right away and how will this work if buyer agrees to purchase "as is" will I confuse the seller and title company? can it be done or do I have to close in thirty days and then place sell ad? Thank you.
It is completely legal to buy and immediately sell. It is legal to advertise and agree a sale for something you do not own yet.
You will have problems trying to do a double escrow with most of the larger title companies. They prefer to have the title completely clean if they are writing title insurance. If you do a back-to-back transaction where the first sale is not recorded before the second one happens it can make folks nervous.
If you are selling to a buyer who is obtaining new financing then the lender will likely have a problem also if they notice that the price jumped immediately prior.
You can assign your position and then the buyer closes directly with the seller. There would be one escrow, one sale price, etc. The lender might still have an issue as the seller (you according to the earnest money the buyer will have) shows someone not on the title. If they want to look further then they will see that you are buying at a lower price.
Others can suggest ways around this. One that I know will work but will not get you your cash immediately is to take back a second until the value and price season so the buyer can refinance.
Bottom line is there will be questions why a seller is leaving the money on the table vs. there is something else going on to drive up the price.
John
[addsig]
Thank you John,
I will go forward and try to assign my position. I have built a great relationship with my title company (first name basis). This will be my first time doing this!
I sit here reading this reply with appreciation for your advice. Thank you sir.