Yesterday we took a look at seller financing. There are different techniques for seller financing, and one of them is simultaneous closing. Simultaneous closing offers a way for you to limit the risks that come with seller financing while still using a practical real estate technique. Here’s how it works:

You must find a note investor. This note investor actually buys the seller financed mortgage loan from the seller. So, what you have amounts to two transactions:

1. The seller creates a private home mortgage note with the buyer
2. The seller sells the home mortgage to a note investor

Because these two things happen close to the same day, it is known as a simultaneous closing. You are still financing the transaction, but you have sold the home mortgage, and so you get cash from the note investor, and the buyer makes monthly payments to the person that bought the note.

Simultaneous closing comes with the same advantages as seller financing, but without the same level of risk. Because the note investor buys the home mortgage from you, you get cash and it is the job of the note investor to foreclose if the buyer ends up defaulting. The main downsides of simultaneous closing includes the amounts of legwork involved, as well as the fact that some title companies are not familiar with the process.

Tags: note investor, personal finance, financial planning, finances,
real estate technique, simultaneous closing, home mortgage, seller financing