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.

BREAKING DOWN '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. Purchase-Money Mortgage

    A mortgage issued to the borrower by the seller of the home as ...
  2. Seller Financing

    A real estate agreement where financing provided by the seller ...
  3. Owner Financing

    When a property buyer finances the purchase directly through ...
  4. Settlement Agent

    1. The party involved in completing a transaction between a buyer ...
  5. Affidavit Of Title

    A document provided by the seller of a piece of property that ...
  6. List Price

    1. The manufacturer's suggested retail price, determined by supply ...
Related Articles
  1. Investing

    Ins And Outs Of Seller-Financed Real Estate Deals

    Seller financing works like this: Instead of a buyer receiving a loan from a bank, the person selling the house lends the buyer the money for the purchase.
  2. Investing

    10 Tips for Getting a Fair Price on a Home

    When the housing market booms, it's tougher than ever to get a good price. Make sure the house you choose is worth the price you pay.
  3. Investing

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
  4. Investing

    Rent-To-Own Homes: How The Process Works

    Sometimes there is an alternative way to buy a home: a rent-to-own agreement, also called lease option or lease-to-own. Lease now and pay later can work – for a select few.
  5. Taxes

    Trade Properties To Keep The Taxman At Bay

    Like-kind exchanges can mean a much lower tax bill on real estate for savvy investors.
  6. Investing

    Buying A House Sight Unseen: Good Deal Or Bad Mistake?

    There are significant risks that need to be acknowledged before buying a home without viewing it in person.
  7. Taxes

    How Does a Tax-Free Exchange Work?

    In regards to the sale of property, particularly in real estate, a 1031 exchange is increasingly being recognized for its tax benefits to investors of all levels.
  8. Investing

    What You Should Know About Real Estate Valuation

    Anyone involved in a real transaction can benefit from gaining a basic understanding of the different methods of real estate valuation.
  9. Investing

    What Is A Short-Sale Property & How Does It Work?

    A short sale is an alternative to foreclosure whereby indebted owners get permission from a bank to sell their house for less than amount of the mortgage.
RELATED FAQS
  1. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
  2. What Home-Buying Costs Can I Deduct from Taxes?

    Except for interest, points, real estate taxes and PMI, costs to acquire a home increase the asset’s tax basis and are not ... Read Answer >>
  3. What are the differences between Ex Works (EXW) and Free On Board (FOB)?

    Learn about Ex Works and Free on Board, the main difference between these Incoterms, and the responsibilities of buyers and ... Read Answer >>
  4. What's the difference between a letter of credit and a bank guarantee?

    Learn how letters of credit and bank guarantees differ, how they are used by banks and companies, and how buyers apply to ... Read Answer >>
Trading Center