dealing with a realtor

18 Replies

best ways to get a house under contract from a realtor with no proof of funds

I wouldn't bother trying to wholesale with realtors or property on the MLS in general, if that's what's up. At least you have an MLS property worth looking at. Here they're in the stratosphere!

As far as the proof of funds, I understand that a hard money lender will give you the letter for a fee, at a percentage of the amount you are borrowing.

If the Realtor you are working with is one you have cultivated, that person may have pocket listings, or may be aware of properties coming up for sale. If your relationship is good, those leads could be fed to you. Then, you include the Realtor in the exit strategy, if it was a fix-n-flip type of deal.

That puts a paycheck in the Realtor's pocket, too. Win-win!

No POF? Then provide the realtor with a preapproval or hard money letter. If not leave the guy alone. He's already busy enough for this kind of distractions...

No seller will entertain offers without POF.

Realtors will not consider a offer without POF. Even if he has to show the seller your offer by law, he will advise the seller not to consider it without proper POF.

Additionally, when POF is a given in transactions nowadays, not providing any POF raises so many red flags, the seller would literally be stupid to execute the contract.

I think @Annie Bliss gave you the best advice so far if you really have a great deal.

You can get a POF letter from a hard money lender right online. There are companies that will provide you with as many as you need, and for free.Their goal is that you do business with them on the transaction. They do not however obligate or require that you do the deals with them. Just google online proof of funds letter and you will be able to get what you need and provide that with the offer you make.

Natasha

Hi Dominick,

When my clients (I'm a broker) don't want to provide proof of funds, such as a REBNY statement or bank statement showing available cash, I tell them they need their CPA to provide a signed letter on their company letterhead verifying last two years' income and total net worth, and show the first two pages of their last two years' tax returns or W2.

Ask your client if they're willing to sign a non-contingent contract without showing proof of funds? That's a good way to get them to reveal if they're ready, willing and able to act on a property.

Best,

Barry

@Natasha Wade

I suspect this happens but on its face its TERRIBLE business practice.. and as HML I would NEVER do this.. giving nameless people who may or may not be credit worthy the ability to tie up property, based on this phony letter is just HORRIBLE way to do business.

In my mind your either in the business ,,, have thought it through enough to have capital or the ability to get capital or you sit it out until you do...

LOL   blind leading the blind..  And a total disservice to the seller.

And any RE broker worth their salt will realize these bogus POF letters are just what they are worthless piece of paper

lol.... I am so glad there are so many bad agents out there... it makes it SO easy for me.

@Jay Hinrichs

Yes you are correct, it is not the best business practice. I have been asked to show POF on at 30k house. I am like are you for real? I have been shown multi million dollar homes with no POF on a regular basis. For submitting an offer I can understand why they would like to see a POF. But not for showing a home. I personally use Private lenders. Some of my lenders use the operative word private for a reason. So can i get a POF statement from them.. no. In fact I usually have to contract on the home first and then get their approval as to whether they want to invest in it or not. Usually it is yes, but I cant flaunt their money first then get the property. Sort of feels like a catch 22 for me.

Originally posted by @Joseph Cox :

1.No seller will entertain offers without POF.

2. Realtors will not consider a offer without POF. Even if he has to show the seller your offer by law,

3. he will advise the seller not to consider it without proper POF.

4. Additionally, when POF is a given in transactions nowadays, not providing any POF raises so many red flags, the seller would literally be stupid to execute the contract.

These four statements you made are 100% INCORRECT and wrong.

1. I just did the last 5 deals I've done without ANYONE asking for POF

2.  I am a Realtor®, and while that is GENERALLY true, not ALL Agents are GOOD agents... many will screw up.

3.  Again, NOT Correct.  You are assuming ALL agents know what's up, which as a broker of 19 years experience I can attest is 110% incorrect.

4.  NONSENSE.  A Seller sells a home many times because they trust, for whatever reason, the deal will close.  Either their agent has assured them, or their trust in the purchaser.

After 19 years as a Full time Investing Broker, selling about 75 homes a year at my peak, I can assure you that your entire statement, while SOMETIMES true, is not ALWAYS True.

The newer people should read what you say with a grain of salt on this fact here because as  a Broker myself, I can assure you that is NOT always the case.

Have a Powerful Sales Day! 

@Natasha Wade

 Ok I did not comprehend the OP was talking about just being able to Look at the home.

That falls on the RE broker to Vette his client... and newbie agents can really waste time with tire kickers and those that talk a great game but have no funds to back them up.

its part of the maturation process of an agent.

I was talking about POF that accompanies your offer to purchase or like in our market what is SOP is you should have it with your offer.. if you don't and other offers do have one yours will go bottom of the line.... or the seller will accept with 48 to proof up.

for us when we are selling our new construction homes. I want it for sure and if its an out of state lender or mortgage broker I have never heard of I will check them out.. and in some instance not accept the offer unless they use one of the lenders I know personally can perform and their Prequal letter is worth a Sh$$$  .... LOL

We have Than merril in town this week... Not actually him but the marketing company and in the next 2 weeks Realtors in town will be bombarded with newbies trying to get Realtors to right 50 offers or other such non sense...

@Karl Krentzel

 I think this point is totally market driven... slow market anything flies ,,, super hot market and you better have all your ducks in a row.

And sales can be made by the reputation of the broker... IE listing broker knows of the other brokers bona fides and knows the broker would not be dealing with a no money flake and assures seller everything will go fine.

But right now in OUR market you don't have POF or pre approval and your offers will go nowhere quickly and any agent who does not ask for this up front is really not very swift.

If you want the deals in this hot market you need to put your best foot forward is really bottom line.

times they be changing until they change once again.

@Jay Hinrichs

LOL sometimes it seems like a dirty game. On the flip side though, the POF letter at least from the lenders are not bogus, what is bogus is the investor never intending to use the company. I have used a particular company that is reputable and I would actually love to use them. But the thing is, I do not flip my homes so there is no purpose for me.

It would seem to me that a broker is obligating themselves to making the loan with a POF letter. What happens if the seller accepts the offer, and the lender refuses to make the loan, wouldn't they be open to a lawsuit by the seller? Obviously the lender could put contingencies on the POF letter, but then it totally loses its value.

@Karen Margrave

  all pre qual letters have the wiggle out.. you really don't have a true pre qual until the entire loan has been under written and cleared to close  :)

I agree with many of the responses here.  Why should a Realtor or seller seriously consider your offer if you can't show any financial ability to complete the purchase?  You should also be prepared to produce an earnest money check.  If you can't do this, don't work with a Realtor.  This is how business is done when working with a Realtor.  Some agents may choose not to work this way- In my opinion that is bad business practice if for no other  reason than I don't want to waste my time even SHOWING a house to someone with no ability to buy.  The price of the house doesn't matter.  

@Karl Krentzel

  on another thread that was going around yesterday there is a bunch of fraud going on right now with bogus buyers and sellers trying to snake small dollars out of investors.

And for that reason alone many Realtors chimed in that their brokerages now require verified prequals before they will show property or write offers.. this to keep agents from getting abused and others getting ripped off by this new wave of Nigerian sucker stuff.

And again along with the reality at least in our market No prequel and your not going to buy much if anything.. And really any agent that does not prequel a buyer up front is really wasting their time...

Originally posted by @Jay Hinrichs :

@Karl Krentzel

  on another thread that was going around yesterday there is a bunch of fraud going on right now with bogus buyers and sellers trying to snake small dollars out of investors.

And for that reason alone many Realtors chimed in that their brokerages now require verified prequals before they will show property or write offers.. this to keep agents from getting abused and others getting ripped off by this new wave of Nigerian sucker stuff.

And again along with the reality at least in our market No prequel and your not going to buy much if anything.. And really any agent that does not prequel a buyer up front is really wasting their time...

 Well, I would agree with pretty much everything you say. 

I would also add that not all agents are good, and they certainly don't "follow what their brokerages say" 100% of the time.  

I also know that not every homeowner who has a home for sale is represented by an agent.

I also know that if you have a lot of sales skills, versatility, and are "appearing the part", many times that will overcome any questions someone has about a POF.

Just my experience.  But then, I could be wrong. I frequently am.

Have a Powerful Sales Day! 

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