Simultaneous Closing - SIMO

AAA

DEFINITION of 'Simultaneous Closing - SIMO'

A real estate financing strategy in which two simultaneous transactions occur during the closing on a piece of property. The seller creates a mortgage note on the property to help finance the property for the buyer. The note is then sold to an investor upon closing, which pays the seller cash. The buyer thus makes mortgage payments to the investor holding the note, the seller receives cash from the investor for the note, and the buyer receives the title to the property. This removes the seller from future transactions, as he or she will not receive mortgage payments.

INVESTOPEDIA EXPLAINS 'Simultaneous Closing - SIMO'

The seller may be motivated to initiate a simultaneous closing if cash is needed in the short term. The buyer is more likely to receive favorable financing from the seller because of the shortened transaction period. Some companies will not ensure the property title during a simultaneous close due to the speed of the transaction, since the parties' credit worthiness will be harder to determine in such a short time.

RELATED TERMS
  1. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  2. Escrow

    A financial instrument held by a third party on behalf of the ...
  3. Closing

    The end of a trading session. The closing of a trading day halts ...
  4. Note

    A financial security that generally has a longer term than a ...
  5. Title

    The right to the ownership and possession of any item that may ...
  6. Predatory Lending

    Unscrupulous actions carried out by a lender to entice, induce ...
Related Articles
  1. Understanding Leveraged Buyouts
    Fundamental Analysis

    Understanding Leveraged Buyouts

  2. Homeowners, Beware These Scams!
    Home & Auto

    Homeowners, Beware These Scams!

  3. The Pitfalls Of Buying A Foreclosure ...
    Home & Auto

    The Pitfalls Of Buying A Foreclosure ...

  4. Subprime Lending: Helping Hand Or Underhanded?
    Investing Basics

    Subprime Lending: Helping Hand Or Underhanded?

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center