Simultaneous Closing - SIMO


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.

  1. Mortgage Fraud

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

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

    Unscrupulous actions carried out by a lender to entice, induce ...
  4. Closing

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

    A financial security that generally has a longer term than a ...
  6. Escrow

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