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MIG exists to serve the Memphis-area real estate investment community. Our mission is to provide our members the education, training, motivation and networking opportunities that will further the ethical investment in real estate.

 

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Double Close or Assignment of Contract

Double Close or Assignment of Contract
By Curt Davis
Posted on 9/5/2013 11:28 AM
   Double Close or

 
Assignment of Contract

Many new investors are always wondering what the difference between a double close and an assignment of contract.  When doing a double close you are putting the property under contract as the buyer and then you sell the home to your buyer on a separate contract as seller.  When the closing attorney closes the transaction you will actually own the home for a brief moment and you will also pay closing costs and fees.  The closing attorney will use your buyers funds to pay the person you are buying the home from. ( Note: some closing attorneys will require you to use transactional funds for double closings.  Make sure your closing attorney can work around this as in my experience I have never had to do it that way

Assignment of contract is where you put the home under contract for example, Buyer - John Smith and or assigns,  this gives you the ability to assign your contract to another end buyer.  Your buyer will have to sign an assignment contract document and they will see how much you are making as an assignment fee.  This is why many investors like to do double closings as some end buyers, though it should not be an issue will back out of the deal if they feel you are making too much in profit off them.  You will not have any expenses doing an assignment contract.  

Hopefully this gives you a little more insight into the differences of a double close and an assignment of contract transaction.