I just finalized an offer on a reo this week, and they indeed asked for proof of funds. The pp is 10k, and I have more than that in cash in the bank. I called a mortgage broker who has become a friend, though, and asked if he would type out a quick letter saying I had a line of credit sufficient to cover the purchase. He did and I faxed it over to the listing agent. I would have used the banker, but he was out sick. Just shows the value of having many good, reliable partners on your team.
Good luck.
HR
PS. Make sure you really can close. If I coulden’t, this broker would have been liable as well. Because of other transactions we’ve done, though, he trusted me. Build relationships. I would have had some other difficulties with sales in December if I didn’t have a good realtor, termite man, and licensed home inspector in my back pocket when needed. Develop those networks. They are invaluable.
I had a new one thrown at me today… Foreclosed property with great numbers but the bank wants proof of funds to close.
How and what do I provide them as I do not have proof of funds to close. I can get a hard money loan on the deal but I do not have proof of funds to close the transaction.
I don’t want to lose the deal so your help is appreciated.
Pretty common really on REO’s. If your offer is a cash offer then the bank/seller wants proof that you have the cash or a credit line where you will get the cash. If you don’t have cash then they want a pre-qualification letter from a lender.
The point behind it is that they don’t want to get into a contract with a guy with no cash and no loan…who is in the deal with a hope and prayer that he will be able to flip. I would say that most REO’s would require this today…and most sophisticated sellers of any type might well require it.
If you have a hard money lender, get them to issue an approval letter as Carey mentions below.
Re: Seller wants proof of funds? - Posted by Carey_PA
Posted by Carey_PA on January 12, 2001 at 12:45:54:
I was working on a forclosed property too and the bank wanted proof of funds as well. I didn’t have the actually money either, I was going to use a hard money lender. I explained the situation to the hard money lender and they said that they would have no problem writing me a letter stating that they reviewed my credit and finances etc. and that they would lend me the money for the purchase of the property.
I didn’t go through with the deal btw, because things with me and the hard money lender didn’t work out, but perhaps your potential hard money lender would write you an approval letter too.
Re: Seller wants proof of funds? - Posted by Kyle (OH)
Posted by Kyle (OH) on January 12, 2001 at 12:34:58:
Someone can correct me if I’m wrong but in the deal I’m currently in I had to show statements that proved I had the d.p. for the bank. I have never had to prove for a seller. A prequal letter should suffice though. I don’t know how hard that will be for you to get.