Posted by Janice (OR) on December 06, 2000 at 20:57:29:
It’s up to the seller if they want to require a prequal letter. It’s pretty easy to get. It just says that based on what you have told them, they would give you a loan. Have them put the offer amount in the letter. You don’t have to use them unless you put in your earnest money agreement that you will use them. On the other hand, if you don’t specify where the funds will come from, and you need to back out, the seller could try to keep your earnest money by saying you have to take any loan you can qualify for.
Bank Owned. Sold As Is. Call agent for availability and addendums. A pre-qual letter or verification of cash funds must accompany all offers.
I thought realtors were required to submit all offers?
Can they require this?
And finally - I intend to creatively finance everything right now or get a buyer buy the property from me within the 30 days for the contract time. I.E. I’m using other people’s money, none of mine, and I’m not going to use my credit.
Posted by SCook85 on December 07, 2000 at 07:46:51:
The prequalification letter is at the request of the seller/bank. Not the realtor. You are welcome to put your offer in without one, the realtor will present it but the offer will not even be entertained.
What the banks are trying to avoid by having buyers with cash or a “solid” prequalification letter is people who want to do what you want to do. And that is settle on their property only if you find a buyer. They are not interested in having you tie up their property in the hopes that you can find a buyer for it.
Now I’m not knocking your method because I do it all the time, however you need to be prepared to settle on the home in the event that you can’t find a buyer, so I do not suggest making offers on homes that you don’t want or can’t buy. The banks have had an opportunity to read all the courses that you, I and everyone else has. They know all the tricks (most of them) and they are doing what they can to protect themselves. They do not want so called investors across the country getting wealthy at their expense.
To answer your question about whether or not you have to use the lender in your prequalification letter, no you do not have to use the lender who wrote the letter, but you do need to comply with the terms of the contract which will probably require you to apply for your financing within a period of about 10 days from contract signing and you need to make a legitimate effort to obtain the financing if you are going to live up to the terms of the contract.
The next issue that you will encounter is that you will not be able to take the “non-assignability” clause out of the contract. Banks have wised up to this as well. They can’t stop you from doing a simultaneous close, however they will in most cases now make you go through the additional expense of paying for two settlements.