Buyers in Colorado Springs have probably noticed some of the short sale properties they have seen are double close transactions. An investor usually negotiates the short sale with the bank in advance for the seller and then finds a buyer for the property. The investor closes on the buying and selling side of the transaction in the same day and usually makes a profit by selling the property to the new buyer for a higher price than what was negotiated with the bank.
The listing agent facilitates the transaction while the investor negotiates the short sale. One benefit to the buyer in this situation is that the buyer does not have to wait on the bank’s approval of the short sale since the short sale has already been approved by the bank through negotiations with the investor in advance.
Although, double closings are not illegal, many lenders do not allow a borrower to close on this type of transaction. There are a few lenders in Colorado Springs who approve double closings but not many. If you find a home requiring a double closing and your current lender doesn’t allow it, you will have to find someone else who does and get preapproved through the new lender.
Buyers who choose FHA financing, can cross double close properties off of their list. An FHA buyer cannot purchase a property requiring a double closing since the seller has to own the property for at least 90 days under FHA guidelines.