Deal structure

When to use a double close to hide your assignment fee

You would typically use a double close to hide your assignment fee when a seller expresses strong concern about your profit margin or might try to go around you to your end buyer. This structure involves two separate transactions, making your profit less transparent to the original seller.

October 10, 2026 · 3 min read

Why some sellers care about your profit

Not every seller minds that you make a profit, but some do. A seller might feel that if he or she sells his or her house at a certain price, and you immediately sell it for significantly more, he or she was taken advantage of. This often happens if he or she somehow finds out your assignment fee after signing the initial contract.

This concern can lead to mistrust, attempts to renegotiate, or even trying to back out of the deal. While your contract protects you, it is often simpler to avoid the conflict entirely. A double close can help manage these expectations.

How a double close works for transparency

A double close involves two separate transactions happening back-to-back, usually on the same day, at the same title company. In the first transaction (A-B), you, the investor, buy the property from the original seller. In the second transaction (B-C), you immediately sell the property to your end buyer.

Because these are two distinct closings, the original seller (A) only sees the price you paid him or her, and your end buyer (C) only sees the price he or she paid you. Your profit, which is the difference between the A-B and B-C prices, is not disclosed to either party.

The practical steps of a double close

First, you sign a purchase agreement with the motivated seller (Contract A-B). Then, you find an end buyer and sign a second purchase agreement (Contract B-C) to sell the property to him or her. Both contracts are sent to the title company or closing attorney.

On closing day, the title company will first close the A-B transaction, where you acquire the property. Immediately after, the B-C transaction closes, where you sell the property to your end buyer. This requires careful coordination by the closing agent to ensure funds are transferred smoothly.

Costs and funding a double close

The main downside of a double close is that it typically involves two sets of closing costs, one for each transaction. This means higher expenses compared to a single assignment. You will also need to have funds to briefly close the A-B transaction. This is usually covered by transactional funding, a short-term loan specifically designed to fund the first leg of a double close.

Transactional funding is usually repaid within hours or days from the proceeds of the second sale. Lenders for transactional funding typically charge a flat fee or a small percentage of the loan amount, making it a viable option for many investors. This is not financial advice.

Considering the alternatives

Before deciding on a double close, consider if an assignment of contract would work. If the seller is not sensitive about your profit, an assignment is simpler and incurs only one set of closing costs. You would assign your contract rights to the end buyer for a fee.

Another alternative, though less common for wholesale, is a novation agreement. This involves modifying the original contract to substitute the buyer with your end buyer, effectively making the end buyer the new party to the original agreement. This can be complex and requires seller consent.

Questions people ask

Is a double close always more expensive than an assignment?

Yes, generally. A double close involves two separate closings, meaning two sets of closing costs and often transactional funding fees. An assignment only involves one closing and a single assignment fee.

Does a double close take longer to close?

The actual closing process might be a bit more complex on paper, but practically, both transactions typically happen back-to-back on the same day. The overall timeline from contract to close should be similar to an assignment, depending on the title company's efficiency.

What if my end buyer backs out during a double close?

This is a significant risk. If your end buyer backs out after you have closed on the A-B transaction, you are left owning the property and need to find a new buyer quickly or fulfill the purchase yourself. This is why a solid end buyer and transactional funding are critical.

Is this legal?

Generally, yes, a double close is a legal transaction method. However, real estate laws vary by state and jurisdiction. It is always wise to consult with a reputable real estate attorney or title company in your area to ensure compliance with local regulations. This is not legal advice.