How to Manage Concurrent Closings
Concurrent closing on two properties is common in real estate today because they eliminate the need to move twice and the net proceeds from the sale can be used as down payment on the
A title and escrow company has two functions;
- To provide Title Insurance that assures there are no clouds on the title, ownership of the property.
- To be a neutral third party that has a fiduciary duty to both parties in regards to escrow. The escrow is done by having the funds from the sale of the property going to the escrow rather than you. Why? Because if there was a profit or a loss you would have a taxable event. When the third party holds the money is is not. That escrow money then transfers that money to the new purchase.
This is what my team does every day and does it smoothly while keeping you abreast of any crucial information. I have found that different lenders communicate differently. I let lenders know that we need a little more hand holding through the transaction so my clients are never in the dark. Two of the best lenders I know also happen to be the worst communicators which is fine if you do this every day. I want my clients to get really great care.
Timing is the most crucial issue because certain events must precede others, and all parties to the transaction (buyers, sellers, realtors, lenders, and title company) must be kept apprised of all details.
Choose a date for the closing that will realistically allow enough time to complete all the
required work. Then allow a few days extra, if possible! Avoid scheduling a concurrent closing on the last day of the month in order to avoid problems if a last-minute delay requires pushing the transaction into the next month.
For a smooth transaction, it helps to schedule both closings at the same title company and with the same officer. The main benefit is timing in the transfer of funds. Too long a delay can throw the transaction into the next day. If the properties are in different cities or states, it is better to close on the home you are selling the day before closing the home you are purchasing.