Wholesale problem double closing

[Jim B.]

I need some help, is there anyone who can give me the right information to resolve this?

My escrow company says this is illegal for double closing in California, yet I hear of people doing it all the time. Is this legal or not and how is it done, step by step so I can inform my escrow officer.

Thank you for your help

Jim B

[Laura Ozols]

@Jim B.

 It is not illegal but in practice it may not be possible to do in the same day. It depends on your local county's policy on deed recordings.

State law requires that escrow and title have "good funds" before they can release money. What that means is that an escrow or title company must actually confirm receipt of funds before they can move it to the next party. When an escrow closes the money must be transferred from the title company of one escrow to the title company of the next escrow. This is normally done with a wire transfer and it often takes two or three hours to confirm that the funds have been received. So, here's how it looks:

Escrow #1:
Deed records at 10:00am
Wire is sent to escrow #2 at 10:45am
Escrow #2:
Wire is received at 2:00pm
Deed is recorded asap. This is where the hangup occurs.

Some counties have deadlines for recording. The deadline can be as early as 10:00 am. With a 10:00 am deadline there is no way the second escrow can record on the same day. 

To close on the same day it is more likely to happen if both transactions are held at the same escrow and the same title company and if the second property is in a county that has a second, afternoon or late recording. This makes it easier for the set up, the balancing and the recording. 

So, in practice, sometimes you can close on the same day but many times it is one day later. Hope this helps.