i was chatting with my broker today about a commercial property that I wanted to make an offer on. The plan was to raise the funds from investors after the offer had been accepted. My broker told me that as of Jan 1 the new PA contracts have to show the money available-in other words, the funds all have to be ready to go prior to the acceptance of the offer. this seems incredibly difficult to do since it would mean having the investors money in place without the deal wrapped up.
has anyone else experienced this issue with PA's? what the best step by step process to present to an investor without a deal in escrow yet?
This doesn't seem workable at all. How does he suggest you approach the investors? Perhaps you should ask your investors for 30% more than you plan to offer for the property to give you room to negotiate (assuming 30% more might still make sense.)
What if you are asking for a seller carryback? Should you inform your investors that they may be getting an immediate return of 20-30% of their funds if the seller agrees to carry some financing and you would hope they wouldn't expect a fee for having the funds on deposit for a month or so?
What if you can't come to terms but your investors have put funds on hold for you? How long do you think it will be before they no longer open your e-mail?
IMHO I think your broker is more so stating he or she wants to see a pre approval or POF as all agents want so that they're time isn't wasted.
I have never heard of such a ludicrous thing in all my life. I tend to believe @Jeremy Prunty has probably hit the nail on the head. It may be time to find a new broker. Or you can always look at him as if he has four heads and tell him you will use your own contract then. The PA contract is just what they WANT to use. They are not required to do so by law.
You have just entered the Twilight Zone.
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