ALL CASH OFFER (But I have a pre-approval letter)

6 Replies

So I put in an offer on a house for $75,000 ALL CASH. I plan on getting that cash from a Hard Money Lender. When my agent asked me for proof of funds, I sent them a pre-approval letter from my Hard Money Lender. Now the Seller's agent is questioning, if I'm paying ALL CASH, why do I need an approval letter?

We tried explaining the process of getting a Hard Money Loan, but either she doesn't understand, or maybe I don't fully understand. But we told her that the seller will get their money in cash, no matter where or how I get it.

What am I doing wrong? And how do I get past this Contract phase? Because I really want to just get this house under contract and move on before it gets too cold out. 

@Montez Greer

If the cash isn't in your bank account, it's not an all cash deal. Draw the funds first then you can claim "all cash." The pre-approval letter doesn't mean much other than on preliminary investigation by your lender, you possibly qualify for the loan. From their standpoint, they don't know what conditions those funds will be released to you on. After the pre-approval, you normally get a "loan commitment."

Hope that helps and good luck.

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@Montez Greer

Getting the money from a hard money lender depends on their lending requirements. So, you ought to ask your lender what you need to do before you can move forward.

Also, if I were you, as a matter of due diligence, I would consult an attorney for each step of the process.

Originally posted by @Montez Greer:

So the Hard Money Lenders will give me the money, and then I can tell the Seller it is an All CASH offer? 

If not, I should just present it though I'm getting a traditional loan?

No HML will give you the money directly, no. That would be a quick way to go out of business.

You aren't a cash buyer, nor are you a buyer using traditional financing. Disclose your plan; HML close quick or don't close at all, so the seller and listing agent aren't going to view it as a 'bad' thing that you're using hard money.

@Montez Greer

Don’t get a preapproval letter get a proof of funds letter. Talk to your hml and ask them what they’re willing to lend on with you and if they would be willing to get you a proof of funds letter/statement so you can close more deals quickly.