Real estate wholesaling has long been a strategy for investors to earn profits without needing significant capital or holding property long term. Traditionally, assignment contracts were the go-to method for closing deals. However, a growing number of wholesalers are shifting toward double closings—also known as simultaneous or back-to-back closings—as a way to complete transactions. This shift is driven by changing market dynamics, legal pressures, and a desire to preserve deal integrity.
Understanding the Double Close
In a double close, a wholesaler conducts two separate transactions on the same day (or within a short window). First, the wholesaler purchases the property from the seller. Then, the wholesaler sells that same property to the end buyer, often for a higher price, thereby earning a profit. Unlike an assignment, where the wholesaler transfers their contract to the buyer for a fee, the double close involves actual ownership of the property, even if only for a few minutes.
Key Reasons for the Shift
1. Protecting Profit Margins
One of the main drivers behind the move to double closings is the need to protect profits. In assignment deals, the buyer sees the wholesale fee on the contract. If the markup is significant—say $30,000 or more—it can cause friction or even prompt the buyer to walk away. With a double close, the buyer never sees what the wholesaler paid for the property, which keeps the profit private and often leads to smoother transactions.
2. Legal and Regulatory Pressure
Some states and local jurisdictions are tightening rules around assignment contracts. For instance, several markets now require wholesalers to be licensed real estate agents or disclose their assignment fees to sellers and buyers. In response, many wholesalers are choosing double closes to avoid regulatory scrutiny. By completing two distinct transactions, they are engaging in a more traditional real estate process that is less likely to raise legal red flags.
3. Building Credibility with Sellers and Buyers
Sellers are increasingly wary of assignments, especially if they’ve been burned in the past by deals falling through. A double close gives the seller more confidence because they are selling to someone who will actually take title to the property. On the buyer side, especially with experienced investors, double closings create a cleaner transfer with fewer questions about the chain of title or control over the property.
4. Access to Transactional Funding
Transactional funding—short-term, same-day loans used to facilitate double closes—has become more widely available and competitive. These loans are specifically designed for wholesalers to buy and resell property quickly. As access to this funding has grown, double closing has become a more viable strategy, even for newer wholesalers with limited capital.
5. Dealing with Title Company Requirements
More title companies are now scrutinizing assignment contracts and, in some cases, refusing to process them. This is especially true in states with stricter real estate laws or where wholesalers have developed a poor reputation. Double closing circumvents this issue by sticking to standard sale processes and minimizing complications during escrow.
Is the Double Close Right for Everyone?
While double closes offer many advantages, they are not without challenges. They involve additional closing costs, require access to short-term funding, and necessitate excellent coordination. Wholesalers need to have a reliable title company and a solid relationship with transactional lenders to make these deals work seamlessly.
Still, for many professionals in the field, the benefits outweigh the drawbacks. As markets become more competitive and transparency becomes more important, double closing is emerging as a preferred method that allows wholesalers to scale their business, stay compliant, and protect their margins.
Final Thoughts
The real estate wholesaling landscape is evolving. With more eyes on wholesaler practices and a greater need for discretion and professionalism, double closes provide a flexible, legal, and efficient way to do business. For wholesalers looking to future-proof their strategy and maintain profitability, mastering the double close is quickly becoming essential.
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Real estate wholesaling has become a popular investment strategy, but several states have recently enacted or are in the process of implementing laws that significantly impact how wholesalers operate. These legislative changes aim to increase transparency, protect consumers, and ensure ethical practices within the industry. Here’s an overview of key states where wholesaling laws are evolving:Welcome to Oklahoma’s Official Web Site
1. Pennsylvania
In July 2024, Pennsylvania passed Act 52 of 2024, known as the Wholesale Real Estate Transaction Transparency and Protection Act. Effective January 4, 2025, this law requires individuals engaging in residential wholesaling to obtain a real estate license. It also mandates clear disclosures to consumers, including the right to cancel agreements and access to property appraisals. The law aims to protect homeowners from predatory practices and ensure transparency in wholesale transactions. dornish.net+1PR Newswire+1dornish.net+3PR Newswire+3Pennsylvania Association of Realtors+3Inquirer.com
2. Oklahoma
Oklahoma implemented the Predatory Real Estate Wholesaler Prohibition Act on November 1, 2021. This legislation requires wholesalers to obtain a real estate license and adhere to state laws designed to promote consumer protection and ethical practices. The law addresses concerns about misleading sales tactics and aims to increase accountability within the industry. Welcome to Oklahoma’s Official Web Site
3. Oregon
Oregon enacted House Bill 4058, signed into law on March 7, 2024. This law requires wholesalers to register with the Oregon Real Estate Agency (OREA) as residential property wholesalers. Registration includes background checks and the provision of plain language disclosure statements to consumers. The law aims to enhance transparency and protect consumers from unethical wholesaling practices. Pennsylvania Association of Realtors+2Oregon.gov+2Oregon.gov+2
4. South Carolina
South Carolina’s House Bill 4754, enacted on May 29, 2024, introduces new restrictions on wholesaling. While assigning contracts is still allowed, marketing or advertising for profit is prohibited. Real estate brokers are also restricted from engaging in wholesaling activities. These changes aim to regulate wholesaling practices and ensure ethical conduct within the industry. doubleclose.com+1thewholesalerstoolbox.com+1
5. Kentucky
Kentucky’s House Bill 62, signed into law on March 23, 2023, brings wholesalers under the definition of “real estate brokerage.” This means wholesalers must obtain a real estate sales associate or broker license to advertise the sale of a wholesale contract. The law aims to regulate advertising practices and ensure that wholesalers operate within the legal framework established for real estate professionals. thewholesalerstoolbox.com
These legislative changes reflect a growing trend toward regulating wholesaling practices to protect consumers and ensure ethical conduct within the real estate industry. Wholesalers operating in these states must stay informed about the specific requirements and comply with the new laws to continue their business legally.Welcome to Oklahoma’s Official Web Site