Home Buying in Portland>Question Details

Elisa Boynton, Both Buyer and Seller in Portland, OR

Is simultaneous closing/back to back closing illegal in Oregon?

Asked by Elisa Boynton, Portland, OR Tue Sep 4, 2012

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Have to throw this in people. Its not clear what Elisa means. None of you should make definitive statements. This is how well meaning people can get into trouble.
0 votes Thank Flag Link Tue Sep 4, 2012
Hold on folks. It may be illegal or at least against lenders policy. When I hear this term, it brings back to mind the 80s and substituting buyers. One would buy a home for, say, $50,000 which was under value then sell it to another party for 70,000 within the same transaction. There were several ways of doing that including having a clause in the purchase contract that gave the buyer the right to by way of 'and or assignees' in with their name, etc.

This was responsible for many DISCLOSURE rules and laws. A major change was that an assignee had to be named up front AND the profit disclosed. I cant remember if this is a Fed thing or just state by state. As an ex mortgage company operator, I remember my lenders wouldnt go for anything even close to that. A deal had to be 'seasoned' or it was ruled a flip. Though there is really nothing wrong with flipping a house for profit and the lenders should only be concerned with actual value vs their new loan, they all had cows over it and stopped short term ownership financing.

So, I do not know where Oregon stands on this but its impossible to answer the main question without knowing the exact details. One can interpret many ways the actual wording of the question. Elaborate and I can find out for you or call a real estate atty as someone else suggested.
0 votes Thank Flag Link Tue Sep 4, 2012
Lot's of answers all seem good. Simultaneous closings are not illegal anywhere. I think your concern is more in regards to the loan fraud end of it and as long as you close with your own funds and the other party closes with their funds then it is exactly what you called it, "simultaneous closing". Know if you are closing the loan and you are using funds from someone else’s loan to complete the closing that is illegal everywhere and is known as loan fraud. Maximum penalty is a $1,000,000 fine and 30 years in a Federal Prison. :)
0 votes Thank Flag Link Tue Sep 4, 2012
Vaughn, we are dealing with semantics so I dont think the statement that they are not illegal anywhere is accurate until we know exactly what the questioner is really asking
Flag Tue Sep 4, 2012
Elisa, it is legal and done all time. Tom inglesby, re/max equity group
0 votes Thank Flag Link Tue Sep 4, 2012
Elisa, it is legal and done all time. Tom inglesby, re/max equity group
0 votes Thank Flag Link Tue Sep 4, 2012
I assume, like Jennifer, that you are referring to wholesaling as an investor. No it isn't illegal in Oregon although if you plan to do that with a short sale it is more complicated and some escrow companies may not be willing to do it.
0 votes Thank Flag Link Tue Sep 4, 2012
Hi Elise,
If you are referring to selling your current residence and then closing the same day on a different property you are purchasing then it is more a question of coordination with all parties (buyers, sellers, lenders, escrow, etc.) than legality, as the other answers indicate.

However, if you are talking about purchasing a property and then simultaneously reselling that same property to someone at a profit that is a more complicated matter and one you might want to consult with a real estate attorney on.

Good Luck,
Jennifer
0 votes Thank Flag Link Tue Sep 4, 2012
Oregon is an escrow state. Escrow acts as an independent third party to handle real estate transactions and they have a detailed process to follow for each transaction. Typically there are two parties involved in a purchase and sale agreement. A "simultaneous close" usually means there are four parties that wish to close back-to-back. There is nothing to prevent this happening on the same day but the timing and planning of all parties envolved in the transaction is critical. Funding from lenders, wire transfers, escrow, terms of the agreements, buyers and sellers all need to be working from the same page to make it happen. Your agent can help manage the process but there still could be some issues that come up that are out of his or her control.I have a chart that shows the escrow process and if you are interested, send me an email and I can forward you a copy.
0 votes Thank Flag Link Tue Sep 4, 2012
Illegal, absolutely not. Difficult and ill advised; probably.

While it happens regularly most agents and closing attorneys/company's don't recommend it as you've increased the risk of a crises exponentially. If the first closing gets delayed for any reason it can wreak utter havoc on the second closing. Agents understand why their sellers want it but you should think long and hard and have a serious conversation with all the parties involved in both transactions (specifically the lenders), before making a decision and if you do decide to do this, give everyone involved ample notice.
0 votes Thank Flag Link Tue Sep 4, 2012
No, but it's sometimes hard to achieve because the two (or more) deals involved have to be approved and able to close at the same time; if mortgage lenders are involved, that can make this part particularly challenging in the current lending environment.
0 votes Thank Flag Link Tue Sep 4, 2012
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