Seller’s Realtor asking for Bank Statemenf

Wholesaling
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Seller’s Realtor asking for Bank Statemenf

Melody Kushi
Princeton, NJ · Member since 2019 · 45 posts · 114 votes

Hi BP team!!

I placed my very first cash offer on a SFR yesterday. I read and signed all contracts, included my Addendum stating I have the right to wholesale and forwarded a Proof of Funds letter received by a lender.

Today, I received an answer from seller that there is another offer very close to mine and seller will like a final offer. The good news is I left some wiggle room for this.

Unfortunately, they are also requesting for a Bank Statement stating I have $xxx,xxx amount cash.

If my intention was to wholesale this deal, why do I need to show I have the funds? How can I get around this?

FYI: I haven’t presented this property to any cash buyers because my offer has not been accepted yet.

Your help is much appreciated!

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y

He is calling your bluff on it being a cash offer. If it is cash, then they want to see the cash.

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  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    7y

    @Melody Kushi  Yes, the seller is looking for the best offer.  If the other buyer has cash in their own bank account and can close quickly, it would be a stronger offer than yours.

    4Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    He is calling your bluff on it being a cash offer. If it is cash, then they want to see the cash.

    [email protected]301-893-4635Podcast Guest on Show #192
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    28Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Tom S. What can a new wholesaler do in this case? Should I stay away from MLS listings?

    0Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Russell Brazil will this be something I run into occasionally? What can a new wholesaler do in this case? I’m starting with wholesale to save capital for later rehabs.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    @Melody Kushi

    If you are making cash offers, any astute agent or seller is going to want proof you have the cash.

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    15Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    The agent is protecting the seller from fraud and scammer wholesalers

    24Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Melody Kushi:

    @Tom S. What can a new wholesaler do in this case? Should I stay away from MLS listings?

    The people easiest to take advantage of are the least knowledgeable, yes. A reasonably competent Realtor will always protect their client from "cash buyers" who lack the cash. If you're bringing the buyer and want to get paid, I'd suggest becoming a Realtor, since basically all you are doing here (finding a property on the MLS and selling it to a buyer) is attempting to practice real estate without a license.

    Helpful to remember that traditionally, the buyer's agent wasn't called the buyer's agent, they were called the "selling agent." Listing agent lists it, selling agent sells it. Things are often more straightforward when people don't over-complicate titles. You're trying to sell an MLS property without being a member of the MLS, or licensed to do so. (Yes, I am aware that some folks may have paid $10k to a guru who told them otherwise...)

    17Reply
  • DJ M.
    Realtor · Southeast Michigan · Member since 2017 · 232 posts · 180 votes
    7y

    Best to come clean to the seller now before you dig yourself in too deep. 

    1Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @DJ M. I don’t plan on going forward. Obviously I wouldn’t want to make a deal if I don’t have the funds. But, I will move forward and get a pre-approval from a lender to buy and flip the property since there’s plenty of room for this.

    2Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Chris Mason thanks for the brutal honesty. And you’re 100% correct putting it that way.

    I’ve chosen to get a pre-approval from a private lender and going to rehab the property instead of wholesaling it. There’s plenty of room in the offer to have a successful flip.

    7Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    @Melody Kushi Yes, you’re facing a little reality now.....

    A Cash Offer means the buyer on the contract has the Cash in Their bank account.  There is no “lender” in a Cash Purchase.

    It will be this way on almost all mls deals....and mls deals have already been exposed to the whole Retail market, with no takers at that price....very small chance you can get an investor to buy near that price.

    3Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Wayne Brooks makes sense.

    So, for a newbie like me, do you suggest sticking to buy and hold? Rehabs?

    Wholesale off market deals? Although, there’s a chance I run into the same scenario?

    0Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    If you are trying to wholesale a MLS deal it's not going to happen. Why would a seller with a representation accept a buyer who is not actually going to perform on it? If you want to buy a MLS deal come with a pre-approval and submit an offer and buy it yourself and then flip it.

    6Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Melody Kushi:

    @Chris Mason thanks for the brutal honesty. And you’re 100% correct putting it that way.

    I’ve chosen to get a pre-approval from a private lender and going to rehab the property instead of wholesaling it. There’s plenty of room in the offer to have a successful ...

     Often the property is being sold to a cash buyer as the preference because the house will not qualify for most loans.  If you have a contract for cash, the seller may not be interested in a contract with a loan.  You would have to, as a minimum,  show that the type of loan does not require an inspection or certain condition of the property, and that you can qualify to be funded, and that the lender has the funds to close.  Even then the seller will want a cash buyer.

    2Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    7y
    Originally posted by @Melody Kushi:

    @Wayne Brooks makes sense.

    So, for a newbie like me, do you suggest sticking to buy and hold? Rehabs?

    Wholesale off market deals? Although, there’s a chance I run into the same scenario?

    You have received excellent advice above. As far as what to do moving forward, only you can answer that. If flipping is what interests you the most, then pick that strategy, learn and keep plugging forward, over time, you will be the expert giving advice here. Same goes for any other strategy you decide is best for you, your goals, and your talents.

    Podcast Guest on Show #130
    2Reply
  • Bill Plymouth
    Real Estate Agent · Philadelphia, PA · Member since 2018 · 416 posts · 396 votes
    7y

    @Melody Kushi wholesale works best on off market deals. The goal is to buy at a deep discount and sell again at a higher price that still makes to an investor. You won't get a significant enough discount on the MLS. Here's the problem with the way wholesalers are taught. They are taught lock properties up and flip the contracts. That strategy is all fine and good if you actually intend on closing if you can't flip the contract before the end of the contingency period. If you lock up a property for 30 days but can't find a buyer, you'll cancel your contract on day 29. That leaves the seller (who is most likely in distress if they're working with a wholesaler) high and dry. This could put the seller in an even worse position. They thought you were the answer to their problem. That agent is protecting the seller from that kind of action. If you want to continue to wholesale, find a private lender that can help you close on deals if you can't flip the contract. Don't build your empire on the backs of others! I know you have the best intentions and just want to start your investing career, but keep in mind that our actions effect others one way or another.

    10Reply
  • Tanner Marsey
    Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
    7y

    Proof of funds.... he doesn’t want to waste his time. And you shouldn’t wanna waste yours! If you have the means/access to the cash be upfront and say so.... if you wanna wholesale the deal.... also be upfront and say so.

    2Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Bill Plymouth thank you for the advice!

    I definitely want to rebab, I just didn’t think I had enough capital to do so, hence the reason to want to wholesale first.

    But, after speaking to a private lender, with the cash on hand and my credit score, I can def buy something decent and rehab it, for sure.

    This was a learning experience beyond what I imagined. Only from my first offer, I received much more insights and much appreciated advice.

    0Reply
  • Corey Hawkinson
    Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
    7y

    @Melody Kushi Seems like you have enough answers, but yes, listing agents will do their homework and they should. Fun little story, I met an agent at an event who said he had a 4-plex that sounded perfect for me. I asked about seeing it and told him I would be doing a 1031 exchange. I gave him my business card.

    When I met him at the property we started talking. He said “looks like that Bloomington property would make a really good 1031 exchange. You got a good price when you bought that 5 years ago.” Please note that I never mentioned the details of the house. He researched property records to find that info. Then he asked if I knew —- ——- from Bethel, the college I went to. I gave him a weird smile. He said, “oh, I don’t hide the fact that I google people. If you want me to hold this property for you and not list it, I have to do my due diligence. By the way, really cool thing you guys did with the bench for your friend that passed away.” (Something you can find if you Google me.)

    Was I offended? Not at all! He has a job to do. He has a responsibility to his client! He has to know my 1031 exchange is real. He has to know that Google won’t show fraud / lawsuits / whatever.

    3Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @John Clark I would apologize for my “stupid” mistake, but I shouldn’t for something I didn’t know.

    I’m stepping into this to learn from my mistakes and to never make them again.

    With a decent amount of cash saved up and a 800+ credit score, I can assure you I use my brain for much more than to bash people onto the ground. I really thought this was a community of beginners and experts to lend a hand for each other. Not throw insults at the rookies.

    Anyways, I’ve received great advice...but yours...not so much.

    Sweet dreams my friend ;)

    3Reply
  • Melody Kushi
    OP
    Princeton, NJ · Member since 2019 · 45 posts · 114 votes
    7y

    @Corey Hawkinson wow, I guess it’s true when they say you can find anything if you search hard enough online.

    Definitely received great advice. Appreciate everyone’s attention.

    Might be a little hand holding via internet, but sometimes that’s what is needed to reassure the thoughts in your head, in an unknown territory such as Real Estate...at least for now.

    0Reply
  • Irina Belkofer
    Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    7y
    Originally posted by @Melody Kushi:

    Hi BP team!!

    I placed my very first cash offer on a SFR yesterday. I read and signed all contracts, included my Addendum stating I have the right to wholesale and forwarded a Proof of Funds letter received by a lender.

    Today, I received an answer from seller that there is another offer very close to mine and seller will like a final offer. The good news is I left some wiggle room for this.

    Unfortunately, they are also requesting for a Bank Statement stating I have $xxx,xxx amount cash.

    If my intention was to wholesale this deal, why do I need to show I have the funds? How can I get around this?

    FYI: I haven’t presented this property to any cash buyers because my offer has not been accepted yet.

    Your help is much appreciated!

    Well, offer without POF or preapproval is not an offer - just a cheap talk about it.

    But it's not what's interesting: I wonder why do you think you might get off market buyers for higher price when the house is listed on MLS?

    What’s your strategy? Do you expect people, who want to buy a house, not not check out Zillow, Realtor.com and internet at all?

    I understand you can pull it off with off market sellers but how did you expect to close on publicly listed house?

    1Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Melody Kushi As others have said, wholesaling off the MLS is a big no no. You definitely need to find off market deals if you want to wholesale.

    Also, just because a lender approves you for a hard money loan doesnt mean the property you are getting the loan for is a good property for a flip. Make sure you analyze this deal thoroughly before borrowing money to try to flip it. Its very difficult to find deals with enough margin to flip on the MLS without a significant amount of price reduction. If the house has been listed for any substantial amount of time then also you need to consider why its been on the market as long as it has. In this market, its probably over priced.

    I would hate to hear that your first deal was a lemon and you got into it and lost money simply because some people on BP gave you a hard time about wholesaling. If you are going to flip the best source for deals is going to be off market deals (either finding them yourself or buying from wholesalers). Good luck!!!

    3Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    Wholesaling off the MLS is how you get a really bad reputation

    0Reply
  • Tyler Bobo
    Realtor · Wasilla Alaska · Member since 2019 · 129 posts · 94 votes
    7y

    Irena, the reason wholesaling off the MLS does work is because there are so many bad Realtors. I have bought a LOT of properties off the MLS that were marketed bad and misrepresented. I'm a Realtor so I'm looking at homes all the time, and sometimes I see one in person and think, "Wow, that Realtor messed up!"

    Melody, keep looking at the MLS but other places will be more likely to keep you from the multi offer situation, so look in many places. I've written many a cash deals that the agents didn't require proof of funds and many of owner finance deals where they never requested credit or other documents. There are a lot of inexperienced agents out there that just assume I wouldn't write a cash deal if I didn't have it. I bet if I asked 100 agents in my market what a wholesaler is MOST of them wouldn't know the term. (It's not super common here.)

    Any good agent when presented Multiple Offers will want to make real sure they go with a solid offer, and not lose out because they chose the wrong one.

    Maybe you could partner with someone to show proof of funds? I have a line of credit on a property at a bank where I only have $50 in the account, and when I need proof of funds they write me a letter saying I have it available in my account. So if there's good deals on your MLS and you're missing think of options you can legitimately get the proof of funds. Welcome to Real Estate!

    2Reply
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