What I usually do if the need arrives and it has arrived when purchasing properties from (citi corp’s reo division) is get a letter from a mortgage company faxed to the realtor saying based on Mr. Timko’s Credential’s we feel he will be approved for upto X amount of dollars… Usually they are happy with that… But it would be some good advice to get a pre approval commitment letter for an amount that you are guarenteed to get from the bank prior to any property hunting to save yourself time wasted looking at properties that you wind up not qualifying for…
I got preapproved by a mortgage company and I have their preapproval letter to verify it.
I gave $500 as earnest money on a deal that I need only $1,500 as total closing costs.
My agent (not a buyers agent) presented the offer to the listing agent.
The listing agent said he will not present my offer without a Buyer’s Verification of Assets.
Why? I have been preapproved for the loan.
Gee… I could easily give the entire amount of closing costs to hold in escrow… it’s not much more than the earnest $ deposit!
Isn’t it illegal for the listing agent to REFUSE to present my offer to the sellers? But if I dont do this form, the listing agent may tell the Seller that my offer is not good, or something similar.
Posted by Hugh James on December 17, 1998 at 12:56:11:
Just closed a deal on which I was the listing agent. The seller didn’t trust the buyer (it’s a long story of personalities). It was a vacant lot sold at $23,000. Earnest money was $5,000 certified funds with 15 days to close. Everything on the seller’s side was already verified (survey, title, etc.). The catch – if the buyer failed to close for any reason not related to the fault of the seller, and the buyer forefeits the $5K. Talk about a serious, motivated buyer! We closed in 72 hours. If I were a seller and had serious concerns about my prospective buyer, I’d up the ante on the earnest money and put in a penalty. And yes, I know it’s the stuff of which law suits are made, but wouldn’t it be an interesting party?
Posted by Dave T on December 17, 1998 at 10:03:22:
I had a similar situation about three years ago. I wanted the agent to write up four purchase offers, and I provided a loan committment letter from my mortgage broker. The agent still wanted me to fill out a financial disclosure and argued with my mortgage broker that the letter was insufficient.
I refused to provide the financial disclosure and asserted that my loan committment letter was all that was needed with my offer particularly since there was NO financing contingency in my offers.
Needless to say, I believe that I alienated the agent and it may be a coincidence that all my offers were rejected. I went to the broker in charge of that firm and began working thru him instead.
Within the next eight months, I successfully purchased four investment properties that met my investment criteria and did not provide a financial disclosure to any seller.
Posted by Soapymac on December 17, 1998 at 24:35:58:
and one of them Andrew Smith (Phila) explained quite well in his post.
I would add this. The seller does not want to put his home “under agreement,” and thereby taking it off the market for someone who cannot get the financing (this is a retail situation I’m talking about here.) For all the seller knows, a buyer may NOT qualify for a loan, despite the buyer’s best efforts.
Most RE contracts are written such that if this is the case, all monies are returned to the buyer without penalty, the seller has to put his home back on the market again, and has got zip for the time the home was off the market.
The other side of the equation, I believe, is this. There are certain items in your financial picture that neither the seller nor EITHER OF THE AGENTS need to know about you. The only people who NEED to know those things…are the people loaning you the money. Period.
Solve the problem by getting the commitment letter FROM THE LENDER. That should satisfy the seller and his agent.
If it does not, remember the seller’s name and remember the agent’s name. Then tell both of them this little fact:
“If you do your job well, when someone asks me about you, I will be able to recommend you. If you do NOT do your job well, you can’t pay me enough money TO SHUT ME UP!”
Be prepared to follow through with that statement and see what happens to their attitude.
Posted by Rob FL on December 16, 1998 at 20:10:29:
This happens occasionally. Sometimes sellers tell their agents that they only want serious buyers. I have made offers to sellers contingent on financing and the seller has told me to forget it unless I am preapproved by the lender. If necessary, just show the agent a copy of a current bank statement with the necessary funds in it.
When you say that you have been preapproved and have a letter from a mortgage company to that affect, do you mean that you have been through the entire underwriting process and have a preapproved certification pending you making an offer on a home and the home appraising properly? Many people believe that they are preapproved when they have a letter from a mortgage rep stating that they will qualify for up to a specific amount. That is not the same as preapproved. Even if you have a true preapproval, why not simply comply with the agent’s wishes and verify your funds? The agent is looking out for his client and does not want to look like an idiot presenting an offer from someone who may or may not be qualified. In my area of the country when an offer is presented the seller’s agent wants a buyer’s financial disclosure form completed which lists the buyers, income, assets and liabilities. If you lie on that form and don’t get a mortgage the seller can keep your deposit even if you had a mortgage contingency in your agreement. By the way, I am an investor - not an agent - but I know what agents go through with people and appreciate why they might want to be certain of your ability to qualify unless you genuinely have been through the entire underwriting process.
A Realtor is required by Law to present any offers which are presented to them. Usually, in order to “protect” the seller, they call them and give them a very brief summary and suggest they not take the deal. What you can do is request that you be present when the offer is made, so that you can see the owner’s and be able to explain the deal. Otherwise, I would let the agent know that you are indeed serious, and that if he wants to continue playing games, that is his option, but if he wants to sell the house, that a meeting should be set up for the offer to be made. Be proactive, not reactive, or these people will eat you alive!
Posted by Jim IL. on December 17, 1998 at 01:33:30:
This same situation JUST happened to me. The Seller had already accepted two previous offers, and they fell thru due to the buyers not getting financed. The Agent I was dealing with, (buyers agent) showed me the “counter offer” with the stipulation of “Buyer must provide proof of funding at acceptance of this counter offer.” They also said that the “buyer is aware that the Seller has multiple offers, and can accept which ever one it seems best.”
My response was simple, I wrote a letter on the company letterhead (made on my home P.C.) that said I WOULD NOT disclose my financing to the Seller, because that was between me and my lender and partners. I also stated that, due to being an investor, I had not chosen my exact route to finance this deal. Since I use many different funding methods. I would shop the deal around and choose the best option for me. I explained that this was not a diragatory remark to the seller, simply a business decision to afford me the best possible conclusion to the deal.
Then, on the side I told my agent, if the SELLER did not like that response, fine, lets go onto the next deal.
Can you believe it, they said, “okay, that clause is out!” and they accpeted my offer.
I then ran out and scrambled up a buyer, and am now doing a double close.
There was NO way I could have gotten financed alone, and knew it, but I also new this was a GREAT deal. GREAT deals, always attract the attention of a qualified buyer.
The end result is this, I now have an excellent agent working for me, and another property deal closing. I know this was risky, and maybe even crazy, but what the heck, it worked out.
I’ll now be $12,000 richer, and still looking for that next deal.
Don’t let them bully you, if you feel your finances are your business, then stay firm. But, if you must disclose to get a deal that you REALLY want, do that too. The name of the game is to be creative, and flexible, when you need to be.
while i can certainly appreciate the seller’s agent wanting to insure that his/her client is being presented with a legitimate offer - and one that can be followed-through on, what business is it of the seller and the agent what my entire financial picture looks like? doesn’t that give the seller an unfair advantage? the seller’s agent can look at the financial statement and say “oh - this guy is rich. he can afford to offer us more.”
would it be fair for the buyer to request that seller furnish all his financial so that the buyer can determine “how desperate the buyer really is?”
my finances are my own business and are not subject to the scrutiny of any seller, unless the seller is doing the financing. then he has a legitimate concern. but if my mortgage lender says that i’m a good bet, that’s all the seller should reasonably expect, as far as i’m concerned.
The only challenge I have with this answer, “give them whatever they want”, is that it invades your privacy with something that truly is none of their business. As long as you can get the deal done, it should not matter as far as making the offer. If they truly want to weed people out, then they can ask for a certain amount of money (say $1-5,000) be put in escrow in case the deal does not close.
My financials are my own business and the seller and the Realtor have no business getting involved with it.
If everyone waited for a complete certification of approval and letter of commitment from a lender every time they wanted to do a deal, believe me when I say 90% of Real Estate sales would never happen.
Go to the seller yourself. It’s not hard to find out who the owner is. You WILL still pay the agent a fee, no getting around that… I have found sellers to get furious that an offer was not being presented ! Good luck ! And SCREW that realtor, don’t use him next time ! Good luck.