The states look at this practice as a way to stop "dry" closings. "Dry" closing means "flipping" paper contracts without having any "real" money at the closing table for the first side of a double close.
The "old" way: The title company would use the funds from the second transaction to fund the first.
The "new" way: The title company will use "real" funds to close out the first transaction and then fund the second transaction with funds from the "end" or "long term" funding source.
There are no minimums, just minimum Fees
No credit check
For example:
A = Seller
B = wholesaler
C = investor/end buyer
A
Seller |
|
Use "real" money to close
out transaction |
| |
|
|
B
Wholesale |
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Funding from end lender to pay off balance from first transaction |
|
|
|
C
Investor/End Buyer |
|
|
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