I'm looking at some properties and getting ready to respond to an agent. He stated that, 'he won't show the property without a letter from the bank or proof of funds.' I have a few options of where the funds will come from but, I want to know more about the property.
What questions should I ask about the property prior to getting looking at the property? Can I request previous tax returns and expense reports?
My first agent told me that they wouldn't even show a property until it was in contract! Apparently that's the usual practice around here.
I gleaned as much as I could from the proforma, but you shouldn't take the info on it as accurate.
Depending on the purchase & sale agreement your agent uses, it should ask for those documents for you to be able to inspect. Don't forget the leases too. Form 20 Multi-family is the one I used. Not sure what type of property you are imterested in.
@Carlos Enriquez - Thanks for the reply. I just want to be able to see some information prior to seeing the property. I don't want to waste neither of our time if it doesn't even match my budget or cash flow.
Originally posted by :
.... I don't want to waste neither of our time if it doesn't even match my budget or cash flow.
That's how the agent feels as well, lol! Just get a letter from a bank or from your private lender, or a copy of your savings account statement, or anything that will show the agent that you have the ability to do a deal.
Do you have a buyer agent? The listing agent might be more amenable to talking with them, and your agent can vouch for the fact that you are a serious buyer, not a tire kicker
You're not likely to get any tax returns, or other personal financial data from the seller without a contract, certainly not without showing the ability to actually buy.
@Jean Bolger - Understood. I don't have a buyer agent but my goal was to at least get the information to make an informed decision. I have a few potential investors if the analysis is right. But I understand. Thanks for the wisdom!! :)
@Wayne Brooks - Ok, Understood. I listened to some of the podcasts that mentioned you can request that info. But money talks no doubt.
I too would say I wouldn't show you anything without an ability to purchase, but if you told me a convincing story of how you would obtain the funding, I might proceed. If the building were vacant I would definitely proceed. However, making people leave their apartment for someone who's not a serious buyer is something I won't do.
Can always make an offer with contingencies for physical inspection of the property or documentation. Me personally I would never show anyone a tax return until the prooved they were a serious buyer.
@Mark Gallagher - Hi Mark and thanks for the response. So, as long as I can show the ability to obtain funding then I would be taken more serious. I don't expect for the agent to physically show me the property early on but, my thought process is, I do want to see more information(expenses, etc) on the building prior to negotiations. But I do understand that having proof of funds is the elephant in the room. Thanks again!
At least in our MLS systems here, financial info is usually posted and is easy to share with an potential buyer.
@Mark Gallagher , some of the financial info I can view with each listing thats for sale but I wanted to see more in detail. Nonetheless, I'll be working on the funding.
i'm assuming that this property is a commercial property (ie: NOT a SFH, duplex,triplex, or fourplex). if it is then here is my two cents. no lender will give a pre-approval letter to anyone on a commercial property. They don't care if i show them i have an 800 credit score, a few years tax returns showing i made a whole bunch of money, and that i have a gazillion dollars in the bank. commercial properties are all way to different so its kind of pointless to give a pre-approval letter. as far as showing you financial data. I've found that agents are pretty open to showing tax returns, income and expense statements, rent roll, etc for commerical properties (including apts). i've had sellers agents ask that i sign a confidentiality agreement (stating that i won't share the data with anyone except partner lender). when i was getting started and calling on mls properties, i found the agents open to sending me the tax returns. how else am i supposed to figure out what price to pay if i'm not familiar with the market. also for commercial properties tehre is usually a due diligence period where the buyer can cancel the contract. that is when the seller would show you copies of the leases. with that being said, i've had the sellers agent not willing to tell me what the condition of a vacant property is! if you are buying commerical propeties my advise would be to work with someone that is "CCIM" (go to ccim.com) i've worked with some great sellers agents that weren't but...
i've had the sellers agent refuse to show me a property unless i show pre-approval letter. i just moved on to another property.
now if you are talking a SFH, duplex, triplex, or fourplex here then don't listen to what i just wrote above.
hope this helps.
@Felix Goldstein - Thanks for the response Felix! No, it's not a commercial property but rather a triplex. I'm putting my focus on duplex, triplex, fourplex, or SFH. I just wanted some information to make an informed decision, thats all. :)
@Mitchlyn D. , no problem. try realtymogul.com. they are a lender. they loan on commercial and residential properties.
i had a realtor tell me "you can get a fake pre-approval letter" meaning something where you just go on their site and you can get a letter if you type the right info into the form. it doesn't mean you actually have hte money in the bank, etc. i called on a commerical property today (a little strip center here in the Cleveland Ohio area) when i asked the seller how much his tenants are paying, he said he doesn't disclose that that is private. since i know the market that didn't matter to me. i just saw a FSBO for lease sign in the window of hte property so i called the owner. and i told him that i'm an investor also and maybe he wants to sell me some properties or maybe he wants to buy some of mine. he said well you can buy that one that you drove by. so he really wasn't looking to sell. that might be why he didn't want to tell me how much teh tenants are paying.
yeah i wouldn't give you financials for a residential property. they are all pretty much the same. you can guesstimate the expenses.
Thanks @Felix Goldstein for the CCIM plug. I am working towards my designation and its good to see an acknowledgment and respect for the organization.
@Mitchlyn D. I would say if they don't want to send you information on a property move on. Its our practice to provide an interested party with the financial information needed to analyze a property. In the commercial and investment world its all about the numbers. We first require a confidentiality agreement before releasing information. An exterior visual can give you a good indication of what is inside and how the property is being maintained. We wont disturb tenants on multi family properties until we feel there is good chance an offer would be made. Even then it would only be one or two units to get a feel of the condition and layout. Once an offer is made its up to the seller on what type of financial information is needed for them to make an informed decision. After an offer is agreed upon by both parties the due diligence period starts. That gives you the time to take a deeper look at all aspects of the property and line up your financing.
I would be doing my sellers a dis-service if I turned people away without at least letting them look at the financial information. In today's complex world you will turn off more people that have money than those looking who might not be qualified at that moment. You never know who they know and peoples financial situations change daily, both good and bad.
Keep pressing on, and good luck on your endeavors
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