Making offers before funding is available... Bad Idea?

Question

Can you / Should you put in offers on different properties even if you don't have the funding lined up yet? Will it ruin your reputation if you don't fall through and actually purchase a property if your offer was accepted?

I'm nervous to make offers because I don't want to have to back out of a deal that got accepted if I can't find the funding.

Brock Hoffman · Answer

Thank you, @Riley Kuranishi and @Jason Gines! This helps :)

Jason G. · Answer

@Brock Hoffman, once your offer is accepted you enter into a sales contract and you will need to give an earnest money deposit which will go into escrow.  If you are unable to proceed forward with closing on the property you will likely lose the deposit unless there is a provision in the contract accounting for the reason for not proceeding.  Figure out the price range of the properties you are interested in, get pre-approved by a lender, and get together your down payment, closing costs, and reserves, and then make your offers.  If you do not have the money in place for the down payment and reserves then there is likely possibility that even if you are pre-approved, your financing will fall through.

Riley Kuranishi · Answer

I personally wouldn't. It just wastes both your time and the sellers time if you don't have the proper funding set up yet. Even if you think you're qualified, I would still be sure to have your funding lined up. With the way the market is now, if you're not already pre-approved they won't even look at your offer.

Cheers!