Avoiding A Double Closing
I’ll try to keep this simple. Told a friend I’d buy his condo for $150K. I signed a contract to do so and gave him earnest money. I quickly found a buyer at $166K. I’ve never flipped. If my friend were to learn what someone was willing to pay, I think he would feel like I shorted him on what he could have gotten. He was pretty desperate to unload this property. I don’t want to go through 2 closings if I don’t have too because of the cost. Is there a simple way to resolve this? Thanks to anyone with more insight than I have.
If your friend is desperate to sell the property, you should simply let him know that you are working with other investors and the profit you are making is for finding a buyer and setting up the deal. If he were to sell the condo through a REA, he would be paying the agent a fee. Why should you not get a fee for helping him sell it quickly without a REA. You are making a decent profit off of this deal, however you are not making so much that he should feel you are getting over on him.
Nope, unless you just assign the contract to the end buyer at which point whatever amount you make will appear on the closing statement as an assignment fee.
If your friend was as desperate at the time as you say he is/was, it shouldn't be an issue. Personally, I would spare a few thousand and keep a friendship rather than make it all and lose a friend (if that's the scenario). So I would do a dbl close
You've got a question of ethics or morals here along with your question about techniques of closing.
Other pros can help you with the latter.
I'd suggest resolving for yourself the former before you worry about how to close. Make sure you are doing the right thing (getting a fair dollar amount) so you are not hurting a friend. And let him know you'll be getting some money so there are no surprises. If it is a real friend, you don't want to walk around knowing (or thinking) you ripped him off.
Heck, he might want you to take MORE than you thought : )
Best,
Brian
Being up front in the first place probably would have avoided this situation. Offer to split the money with him.
There are a lot of posts that run along these lines of business with family/friends. I think you have put your finger on a larger issue of whether this is a good idea. I think it can be done if everything is up front and both sides understand what is going on.
Ask your RE attorney about a collapsed closing. This should help you avoid paying a double closing fee.
Its called a simultaneous closing ...
he walks in and sings and leaves
you sing and leave
buyer signs and leaves
buyerhas cash on table
goes to you
goes to friend
everyone happy...
nobody is the wiser and the title never touched you
whats the problem?
Most title companies are familiar with simultaneous closings. Ask one to help. If they cannot, go to one that can.
I agree with above comments on the moral issue. Always better to be up front. If you have a problem with it, give bavk some of your profit to your friend
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