Assignment vs. double close: what is the difference?
In an assignment the wholesaler transfers their contract to the end buyer and is paid a fee at one closing. In a double close the wholesaler buys the property in one closing and sells it to the end buyer in a second, so the end buyer’s price is separate from what the seller receives.
Assignments are simpler and cheaper, but the fee appears on the paperwork. Double closes keep the two prices separate, but they usually involve two closings, extra costs and a way to fund the first purchase, sometimes through transactional funding.
Whichever you use, tell all parties what is happening and ask your title company or attorney whether they handle it in your state.
Common mistakes
- Planning a double close without confirming the title company will do it.
- Forgetting the extra closing costs and funding fees of a double close.
- Using a double close to avoid a disclosure the state requires.
More questions
Do all title companies do double closes?
No. Some will not handle back-to-back closings or require the first closing to be funded separately. Ask before you sign.
What is transactional funding?
A short-term loan, often for a day, that pays for the wholesaler’s purchase in a double close until the end buyer’s money arrives. Lenders charge a fee for it.
Is a double close more private?
Each closing has its own price, so the end buyer does not see the seller’s price on their paperwork. Both sales are still recorded publicly.