Posted by Bill K. (AZ) on March 10, 2000 at 21:27:09:
Calvin,
I didn’t interpret your original post correctly. Let me try again.
I’m assuming that the seller is asking for such a letter or some confirmation of available funds. If not, I wouldn’t bring it up. Otherwise, as you mentioned, a copy of bank statements or account statements should suffice. If the funds are readily available by closing, no one should have to draft a letter.
I hope I helped this time. ;^)
Bill K. (AZ)
WHAT KIND OF LETTER IS NEEDED TO BE LEGAL? - Posted by CALVIN
Posted by CALVIN on March 10, 2000 at 16:53:32:
Hello all,
If my dad is supplying the money for a house that I want to rehab, what kind of letter do I need to prove this? What does the letter need to include? Does it have to be notarized? Does it have to include a statement from his bank to prove that he has the money? What exactly do I need to make this legal?
Thanks!
Calvin
It Depends - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on March 10, 2000 at 17:30:38:
Calvin,
It really depends on what you’re trying to accomplish with this “letter”. As you read on, keep in mind that I’m not an attorney. However, I have borrowed and loaned money in the manner you describe many, many times over the years.
Does your dad want to be secured by the property in order to foreclose if necessary? If so, you’ll need him to become a lienholder. With this, you’ll want to get the document notarized so that it can be recorded. An attorney or title company should be able to help you prepare these forms, and record it, for a small fee.
Does your dad just want a promissory note from you to guarantee repayment? This would be a contract between the two of you that does not need to be notarized. In this case, your dad has no specific recourse against the property, just against you. Although, you may choose to sell the place to get him his cash.
Either one of these documents is not difficult to create. There are free forms available on the internet. Many of mine are just whipped up on the computer. Here’s what mine have included:
Finally, I see no reason for you to get a statement from your dad’s bank to prove he has the money. You shouldn’t enter into this contract until you get the money personally, or it gets held in escrow and released to you as repairs are made.
I hope this helps.
Bill K. (AZ)
I’LL BE MORE SPECIFC…SORRY - Posted by CALVIN
Posted by CALVIN on March 10, 2000 at 19:36:27:
Bill,
Thanks for replying! The purpose of the letter is for the seller of the house that I would be buying. Instead of providing a pre-qual letter in the case of bank financing, I need something to prove to the seller that we (my dad & I) have the cash to pay in full. That is why I ask about a statement from my dad’s bank. So what type of letter do I need for this? Any different from the info. already given?
Thanks again!!!
Calvin