Proof of funds for getting a contract

14 Replies

Question from a newbie: what is required to get a house under contract? Researching private and hard money lenders online, all lenders want a house under contract before releasing funds, however, working with a realtor, they want proof of funds prior to showing a house, let alone putting one under contract. This is a catch 22 that I cannot seem to resolve. Can someone help me with this? Looking to start investing ASAP, just need this last puzzle piece in place. Thank you

Get a different realtor.  It sounds like this bozo doesn't want to "waste his time" on you before showing you a property.

Showing proof of funds with your offer helps bolster the strength of your offer.  Sometimes lenders want to see proof of funds for your down payment portion.

So I currently have the same issue. I have a potential flip that I'd like to submit an offer on. My realtor asked me how I'd be funding it and I told her I'd probably be using partners/private money. She then told me that I'll need POF. Problem is that my investors aren't interested unless I have a deal under contract. Everything I've heard on BP has always said "if you find a good enough deal, the money will come." I've also heard it said that you should get deals under contract to lock them up and then go get your financing figured out.

Any more insight on this would be amazing! 

Well, no informed seller or listing agent is going to let you take a property off the market because you “hope” you can get the financing. Informed buyer agents won’t waste their time either. You need some kind of preapproval.....using hard money or any other type financing is not a Cash offer. Expect to show a PIF for whatever down payment and closing costs are too. 

@Bill Zarzecki I would have to agree with @Wayne Brooks . Nobody wants to waste their time. If you want to get a good realtor (not some newbie/amateur) having proof of funds just cuts useless BS. 

It will expedite the process and help you be taken seriously. You can do it the hard way and hope to purchase something or you can do it the easy way.

I have lots of cash and every agent in my area knows it. I still have to provide proof of funds... because everyone has to. It's just smart business and keeps agents from wasting their time.

Yeah, sometimes you can find a rookie agent that’ll bite, for whatever that is worth.  But, once that agent has spent 50-100 hours over the course of weeks or months with someone, only to find out in the end they really can’t buy......they never do it again.

Originally posted by @Brad Cornell :

So I currently have the same issue. I have a potential flip that I'd like to submit an offer on. My realtor asked me how I'd be funding it and I told her I'd probably be using partners/private money. She then told me that I'll need POF. Problem is that my investors aren't interested unless I have a deal under contract. Everything I've heard on BP has always said "if you find a good enough deal, the money will come." I've also heard it said that you should get deals under contract to lock them up and then go get your financing figured out.

Any more insight on this would be amazing! 

 that's old news.... when the market swings back to a buyers market that may be true but in a sellers market.. not true.. 

and you need a new capital partner if they wont give you POF.. I give all my ground partners fresh POF's on the first off the month so they can go hunting.. ACTUAL bank statements LOL.. that's what you need.. and that's why they use me.. we are for real and know what we are doing and what we need to do to support those who want to do what you want to do... you either have not explained it correctly to those potential money partners or they are nervous nellies and probably wont close anyway.

Originally posted by @Brendon Woirhaye :

There are lots of eager realtors out there who would be happy to help you with your business.

AS wayne stated below you get what you pay for... someone who is willing to run you around with no POF or approvals is a rookie and will soon learn that its a waste of time and never do it again..

in a Buyers market maybe but not today not in a strong sellers market .. its also market dependant as well.. some areas are still fairly dead .. so that might work.. but when your one of 20 offers like whats happening in Vegas.. how is that going to work. 

Originally posted by @Brad Cornell :

@Jay Hinrichs that makes perfect sense. Thanks so much for the clarity. Time to go talk to my investors!

also need to get you out here on the West coast were the trout are measured in pounds not inch's  :)  

You can also save a lot of time by not looking at MLS deals and stop working with realtors altogether. Find your own deals and negotiate with the sellers yourself. You'll make way more money and the deal all around will be better for both you and the seller.

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