Simultaneous Closing - Sell Home Faster and Get Cash at Closing with Simultaneous Closing Technique

Simultaneous closing is one of owner financing/seller financing techniques used by many investors to help them sell their properties faster and get cash at closing. Simultaneous closing is also called "Simo" closing or simultaneous close. This technique works at any market regardless housing market is good or bad. As a home seller, if you got a home to sell quickly, you may want to consider using simultaneous closing as part of your owner financing techniques.

By using owner financing or seller financing, you can market your home or real estate property for sale to get much more interested buyers .

What is Simultaneous Closing and How Simultaneous Closing Works ?

Simultaneous Closing is a real estate seller financing technique, whereby the private mortgage note created by the seller is simultaneously sold to a note buyer on closing.

There are three main parties involved in this transactions:

1) a home seller who is also a mortgage note seller;
2) a home buyer who buys home with seller or owner financing;
3) a note buyer, also called mortage note investor.

In additional, there is a real estate attorney or sometimes a title company to help the transaction. There are may also have real estate agents involved in  the deal to represent home seller or buyer.

Typically, the terms of the note are agreed upon between the  home seller/note seller and the home buyer with some suggestions from the note buyer. On closing day, two transactions take place: a real estate transaction and a note purchase transaction, almost simultaneously.

The home seller/note seller's main motivation for using this technique is to obtain cash on closing or shortly after, instead of receiving the proceeds from the sale over a period of years.

The home buyer's motivation is to obtain more lenient financing from the home seller, especially when credit issues are or have been a problem to get a conventional mortgage loan.

The note buyer is looking for the cash flow from the mortgage note. He has to make sure that he doesn't get too involved in this transaction and thereby appear to be acting as a lender, which he usually is not.

Some title companies are not familiar with this type of transaction and may not be inclined to accept it. They may simply need to review the process with an attorney.

What Are the Benefits of Simultaneous Closing?

a. Benefits to home Seller / Note Seller Using Simultaneous Closing:

1. Seller can broaden their buyer base to reach the home buyers who cannot get a conventional home mortgage;
2. Seller can sell property faster to reduce the holding costs and be more profitable;
3. Seller can use simultaneous close to get cash at closing and quickly move to other investment deals;
4. When seller uses silmutenous close, the risk of home buyer default on mortgage payment is transferred to the note buyer;
5. Seasoned real estate investors can use simultaneous closing technique to buy and sell properties and make profit without using any of their own money.
 
b. Benefits to home Buyer Using Simultaneous Closing:

1. Home buyer can use this technique to buyer home or property without go through the hassel to get a conventional loan. This is very helpful for real estate investors who own more than 4 properties and cannot get a conventional loan anymore, or home buyers who have good income but with bad credit.
2. Home buyers can save money on the costs of finance at the closing table mainly the loan origination fee.

c. Benefits to Note Buyer / Note Investor Using Simultaneous Closing:

The note buyer can come in to make profit buy investing his/her money to get his/her targeted yield of the investment. But, the note buyer will have risk if there is home buyer default on mortgage payment in the future. Note buyers should enough knowledge and expereince to setup deals to prevent and to protect his/her investment on buying mortgage notes.

As a home seller, you will ask “How do I know if simultaneous closing is for me?” and “if it is for me, what is my next steps?”. Stay tune, I will discuss about them in my next post on simultaneous closing. You can bookmark this page, or simply subscribe my free report on simultaneous closing by entering your name nad email address here. I will send you a copy of my free report on simultaneous closing by email.

 

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