How to find a title company that will do a double closing

Why so many title companies say no

A double closing asks a title agent to close and insure two sales of the same property within hours, where the second sale is usually what pays for the first. That pattern is exactly what the industry’s fraud controls are built to catch, so many agents decline the whole category rather than sort good files from bad ones.

A Florida real estate attorney has described the objection plainly: some liken simultaneous closings to check-kiting, where the buyer pays the seller with money it does not have yet, and the comparison is close enough to deter some title insurers, title agents and closing agents from taking part. One Georgia title agency says on its own website that it does not handle double closings, because major underwriters in that state have tightened their guidelines on them.

The reasons come in four groups, and a good title company can tell you which of them it has solved.

• Underwriter rules. The agent issues policies for an underwriter and follows its bulletins. At least one national underwriter keeps bulletins in its Florida library that call flip transactions a claims concern, say that a flip is not necessarily fraudulent or illegal but many are both, and tell its Florida agents not to close one without written approval.
• Fraud history. HUD describes property flipping as reselling a recently acquired property for a considerable profit with an artificially inflated value. A legitimate double close looks similar on paper, so it gets the same scrutiny.
• Seasoning. A property is not eligible for an FHA-insured loan if the end buyer signs the purchase contract 90 days or less after the seller acquired it, and a same day double close fails that test by definition. Other lenders set their own rules.
• Money handling. Most refusals are really about whether the end buyer’s funds may pay for your purchase, which has its own section below.

What a real yes has to include

A title company that says it does double closings may mean something narrower than you need. Some mean they will close an assignment. Some mean they will close both legs only if the end buyer’s money pays for the first. Neither is a same day double close with separately funded legs.

Before you treat the answer as a yes, it should cover all of the following, in writing.

• Both closings, A to B and B to C, handled by the same office on the same day.
• The A to B leg funded with money that is not the end buyer’s: yours, or a transactional lender’s.
• Any underwriter approval obtained before the closing date, not on it.
• A recording order in which the A to B deed records before the B to C deed.
• A named closer who has done one recently and will handle yours.

Where to look

Start with the people who already close these deals. A transactional lender sees which title companies actually get double closings done and which ones back out, and the investors at a local investment club will name the agents they use. Treat both as leads, not answers: the questions below are what turn a name into a closing agent you can write into a contract.

In Florida you can check the license before you call: the Department of Financial Services licenses title agents and runs a public licensee search. An attorney whose practice includes investor transactions is also a real option for a double close.

Searching for an investor friendly or wholesale friendly title company will find agencies that market to wholesalers. Marketing is not an answer either. An agency that advertises double closings but cannot tell you how the A to B leg is funded has told you what you need to know.

Questions to ask before you sign a contract

Ask these before the A to B contract names a closing agent, because once dates are set the title company holds all the leverage. A vague answer is the warning.

• Have you closed a same day double closing in the last twelve months, and who handled it?
• Does your underwriter require approval for a double closing or flip, and how long does approval take?
• How must the A to B leg be funded? Will you accept transactional funding, and have you worked with a transactional lender before?
• Will you allow any of the end buyer’s funds to be used on the A to B side? A clear no is not a bad answer.
• Will you handle both legs yourselves, or will the end buyer’s title company be involved?
• What will you need from the end buyer’s lender, and how will you tell it about the same day transfer?
• What seasoning questions do you expect from the end buyer’s lender, and have you closed with that lender before?
• What are your cut-off times for incoming and outgoing wires, and by what time must both sets of funds arrive?
• Will you confirm in writing that you will close both legs on the scheduled date?
• What are your fees on each leg, and how will each settlement statement show them?

What the title company needs from you

A title agent that agrees to a double closing opens two files and underwrites each one separately. Give it everything early, because every missing document is a reason to move the date.

• The fully signed A to B contract, with any addenda.
• The fully signed B to C contract with the end buyer.
• Your entity documents: formation documents, operating agreement, good standing, and who may sign.
• The end buyer’s contact details, and their lender’s if they are financing.
• Your funding source for the A to B leg: the transactional lender’s contact, its closing instructions and its wire details.
• Seller information for the A to B leg, including any mortgage or lien details you already have.
• Your target closing date and the order of events you expect, in writing.

One closing agent for both legs, or two

Use one closing agent for both legs whenever you can. The deal is two closings, but the funds, the documents and the recording order form one chain, and a chain is easier to control inside one office.

Two title companies at closing usually happens because the end buyer, or the end buyer’s lender, insists on its own agent. It can work, but as one Florida real estate attorney has put it, with different closing agents the flow of funds between the two transactions is interrupted, and it becomes a chicken-and-egg problem that needs the two agents to cooperate. That cooperation can mean telling the other side how the first leg is being paid for.

• Funds: with one agent, the transactional lender’s wire and the end buyer’s funds land in one trust account and both legs pay out in order; with two, proceeds cross between offices through two sets of wire cut-offs.
• Recording: one office controls the order in which the deeds record; with two, the B to C agent must be satisfied the A to B deed will record first.
• Disclosure: one agent sees both sides; two each see half the picture, which is what an end buyer’s lender is most likely to question.
• Failure point: with one agent, its underwriter’s no stops both legs, so ask early; with two, either office can stop the day.

Can the end buyer’s money pay for your purchase?

This question decides most double closings, and many title companies answer no. It is the narrow meaning of a simultaneous closing: the end buyer wires the full price to the closing agent, the agent pays your seller out of it, and you keep the difference. Some Florida attorneys set out how that flow can work, with the agent holding the end buyer’s money until title commitments are in place for both sales, and why it needs everyone’s cooperation.

The objection is about whose money it is. Under Florida law, funds a title agency receives in escrow are trust funds that belong to the person entitled to them, and may be used only in accordance with the escrow, settlement or closing instructions under which they were accepted. Florida’s title escrow rule adds that an agent may not use, endanger or encumber money held in trust without the owner’s permission, given after full disclosure. The Florida Bar’s trust account rule says the same of lawyers: money entrusted for a specific purpose must be applied only to that purpose.

In practice, the end buyer would have to agree in writing, after full disclosure, that their money may pay your seller before your purchase has closed, and a financed end buyer’s lender issues its own closing instructions for its own funds. Some states go further. Utah’s title and escrow rule bars an escrow involving a land flip unless each transaction stands on its own and the funds in each are separate and distinct from the funds in the next. One Florida title agency says on its website that most Florida underwriters prohibit the practice.

Transactional funding exists to make the question go away. The A to B leg is paid with separate money and closes first, and the end buyer’s funds then pay for a sale by a seller who already owns the property.

The transactional lender will call your title company

Expect it, and tell the title company to expect it. A transactional lender is repaid out of the B to C proceeds sitting in the closing agent’s trust account, so the closing agent is the lender’s real counterparty for the day.

Some lenders also ask for a closing protection letter: the underwriter’s undertaking to cover loss caused by its agent’s fraud, dishonesty, misappropriation of funds or failure to follow written closing instructions. Florida law allows title insurers to issue these, on a state-approved form, for a transaction on which the insurer is to issue a policy. A title company that will not take the lender’s call, or will not work to written instructions, is not one to close with.

The call usually covers the same ground.

• That the agent holds both contracts and will close both legs on the date.
• Where the end buyer’s funds are, or whether their lender is clear to close.
• The lender’s written closing instructions, including how and when it is repaid from the B to C proceeds.
• Draft settlement statements for both legs, showing the funding on the A to B side and the repayment on the B to C side.
• Wire details in both directions, confirmed by phone rather than by email.

Red flags that a title company will back out late

Late withdrawals rarely come from nowhere. These signs usually show in the first week, while there is still time to move the file.

• It will not say in writing that it will close both legs.
• It says underwriter approval is needed but has not asked for it.
• Its plan for the A to B leg is the end buyer’s money, and nobody has asked the end buyer or their lender.
• The person who said yes is not the person processing the file.
• Title on the A to B leg has not been ordered a week before closing.
• It raises the end buyer’s lender’s view of the same day transfer for the first time in the final days.
• It cannot give you wire cut-off times, or they keep changing.
• It will not speak to your transactional lender.

Florida: who can close, and what the state fixes

Florida gives you two kinds of closing agent. Title insurance agents are licensed by the Department of Financial Services, and attorneys in good standing with The Florida Bar are exempt from title agent licensing and may handle closings involving title insurance. Either can run a double closing if its underwriter allows it.

Title insurance premiums are set by rule, not by the agent. By statute the state adopts the premium title insurers charge, and the rates apply throughout Florida. Shopping title companies changes the settlement fees and the service, not the premium.

The reissue rate matters on a double close. Under the rate rule, a policy issued less than three years after the owner’s policy insuring the seller in the current transaction can use the lower reissue rate, if that prior policy exists and both the agent and the underwriter keep a copy. On the B to C leg the seller is you, so ask the agent to price your A to B owner’s policy both ways and show what it does to the B to C premium.

Documentary stamp tax is due on both deeds: 70 cents per $100 of consideration, or 60 cents in Miami-Dade County plus a 45 cent surtax unless the document transfers only a single-family dwelling. On a $200,000 purchase resold for $240,000 outside Miami-Dade, that is $1,400 on the first deed and $1,680 on the second, and every party to a document is liable for the tax whichever party agreed to pay it.

What the last week should look like

A title company that does these well runs them to a calendar, roughly like this; anything missing is worth a phone call that day.

• Seven days out: title ordered on both legs, and any underwriter approval requested or in hand.
• Five days out: the transactional lender has spoken to the closer and sent written closing instructions.
• Three days out: draft settlement statements for both legs sent to you and to the lender.
• Two days out: end buyer funds confirmed, or their lender confirms clear to close.
• Closing day: A to B signs and funds, B to C signs and funds, the transactional lender is repaid from the B to C proceeds, and the deeds go to record in order.

Where the funding fits

Most refusals turn on one thing: the end buyer’s money being asked to pay for two sales. Separate funding for the A to B leg removes that objection. It does not remove the underwriter’s rules or the end buyer’s lender’s view of a same day transfer, so those still belong in the first conversation with the title company.

Entrusted Capital is a direct lender that funds the A to B leg of Florida double closings the same day, up to 100% of the purchase price, priced per transaction with no credit pulled for that leg, and provides proof of funds on request against a real deal.