There are various methods of closing a deal. Not all methods may come of use to you but knowing all the possibilities will certainly not harm you either.
Assignment of Contract: This is a type of contract where you do not do anything, you “assign” another person to do everything for you, while also following the terms under which you made the contract. This is the easiest method of closing a deal. However, the disadvantage is that you will not be able to close every deal using this method. For example, many bankers and lenders choose not to allow an assignment of contract.
Assignment of Beneficial Interest: Using this method of deal closing, you can assign a contract that cannot be assigned. Even though you cannot really assign the contract, you can create a trust along with you who will act as the heir and then you can appoint the interest that the heir is to receive. Everything in the contract stays as is, all that is needed to be done is to enlist the buyer or the final recipient as the trust.
Subject To: This is the method used to buy a property that is still pending to have its mortgage paid off completely. In this case, the buyer purchases the property, as it is, and continues making mortgage payments of the previous owner. The problem with this type of deal closing is that, anyone can have it done, by simply making a deed with the seller. However, in many cases, the new owner is not able to sell off the property and ends up returning it to the previous owner. It is due to this that laws have been passed to safeguard the interest of consumers from investors who purchase property using the method “subject to”.
Option: This is a type of deal closing where you do not have a contract for buying a property and instead, you have an alternative to buy a property for a certain period of time at a certain price. Option money is usually non-refundable and it is usually because of this that you should think before you submit the money. If you choose not to use the option after submitting the money, the option will simply expire after the time period. The good thing is that, in an option, once you have paid off the price for the option, there is no further money matter to be dealt with.
Simultaneous Closing: In this method, two deal closings are done at the same time. The advantage being that, the buyer funds the closing. And the outweighing disadvantage being that, if something happens to the buyer, the deals cannot be closed. In such a case, you may even end up being sued by a disappointed seller.
Physical Closing: In this method, you purchase a property with instant cash and because of this; you need to have the money ready from before. This method is desirable because, the deal closing is not affected even if something happens to the buyer.
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