Simultaneous closing is a real estate seller financing technique, whereby the private

mortgage note In the United States, a mortgage note (also known as a ''real estate lien note'', ''borrower's note'') is a promissory note secured by a specified mortgage loan. Mortgage notes are a written promise to repay a specified sum of money plus interest ...

created by the seller is simultaneously sold to a note buyer on closing. Typically, the terms of the note are agreed upon between the seller and the buyer with some suggestions from the note buyer. On closing day, two transactions take place: a real estate transaction and a note purchase transaction, almost simultaneously. Sometimes the note purchase transaction happens a few days or weeks after the real estate transaction. This depends on how early in the process the note buyer gets involved and whether there are closing issues with this transaction.

Motivations

The seller's main motivation for using this technique is to obtain cash on closing or shortly after, instead of receiving the proceeds from the sale over a period of years. The buyer's motivation is to obtain more lenient financing from the seller, especially when

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...

issues are or have been a problem. The note buyer is looking for the cash flow from the mortgage note. He has to make sure that he doesn't get too involved in this transaction and thereby appear to be acting as a lender, which he usually is not.

References

Real estate {{Realestate-stub