Real Estate Agent wants PoF

It is pretty standard to want to see proof of funds. Especially if it is an REO. Banks won't even look at your offer without it.

Even if it isn't an REO, many sellers want to make sure you will be able to complete the purchase if they accept your offer. I'm an agent and I request the proof of funds with every offer that comes into me, even on non-investment transactions. With lending being tight, I want to make sure the buyer can perform. The agent has and obligation to take care of the seller and make the transaction as smooth and easy as possible.

Regarding the EM. Give your agent a check for the amount, but don't let him deposit it. In my state, the EM doesn't need to be deposited until 4 days after acceptance of offer. Banks many times want to see the EM with the offer. Having said that. Very seldom has it been an issue as long as I had the proof of funds to close.

Good luck,
Jim

Thanks for the reply, I understand the need for Proof of Funds and I have no problem providing that, but the problem is the escrow fee checks. I just dont feel comfortable giving my check account information yet being my first time involved with real estate. I've read a lot of Deans books and looked at a lot of his videos but I've never learned about this part. I always thought I would just be able to make offers on the properties and all the fees including the escrow would be handled at closing, being that I'm wholesaling to an end buyer.

Thanks Jim.

Jim's comments are spot on. Send a copy of your check with each offer, and remember that the check typically isn't cashed until 2-4 days after the fully signed P&S agreement. So they'll say the offer was accepted, you sign the contract and hand over the physical check at that time. Note with an REO it will have to be a cashiers check upon signing.

The only other point is $2,500 is on the high side. My experience with MLS properties is that $1,000 should be sufficient. With FSBO you may be able to negotiate anywhere from $100 - $500 even.

Good luck and let us know how it goes!

- Tom

Earnest money will always be an issue. It solidifies the deal.

You need to have your agent present the fact that your an investor and you are putting out many offers and it would be a nightmare to have to write a check for every offer you submitted. That has worked about 99% of the time for me over the years.

Hi Jim,

Here is what you can do...

1) You have to make sure the agent you are using understands what your investment strategy is. If not, the you have to find an agent who does. If you don't establish this up front, then they will be wasting your time, and you will be wasting their's.

2) You can print out a proof of funds letter from a transactional funding site like: coastal-funding.com. The reason you can do this, is because they WILL give you the funds as long as all of their criteria is met. Therefore, you DO have access to these funds.

3) I have a scanned copy of a check that I've given my agent that he uses to submit with any of the deals that require a copy of an EM check. And, once every six months, I scan a new check that is used so that the date showing on the check isn't too far out of date.

An agent who is on board with your investment strategy will submit deals for you with this info all day long. However, an agent who is not on board, will give you every reason why this CAN'T be done. Finding an agent who is the right fit is essential.

Hope this helps,

WHAT is your exit strategy?

Get your POF letter here:

http://besttransactionfunding.com/index.php?ref=reinvestor42

Simply click on "Proof of Funds" tab and you're set.

Best

My exit strategy was to Assign the contract to an end buyer.

Thanks for all the help guys.

- Jay

As a buyer making offers, we have a lot of advantages. We are the ones who initially contact an agent to form a relationship. We are the ones who get to speak first and designate specific things in the offers that we make. The proactive nature of this position can be used strategically if we understand it. And I promise that if you do not use your advantages properly, someone else will try to limit them.
When I initially contact an agent, I ALWAYS make sure that I am the first one to bring up things like Earnest Money deposits, POF letters, who I use as my closing agent, etc. I let them know that my earnest money deposits are going to be $500, payable within 72 hours after acceptance of offer directly to the closing agent who will be ABC LLC, located at 123 Elm Street, etc. I let them know that I can provide a POF on any property, and would they like me to forward them an example to place in my file. I let them know that we will be doing a variety of different transactions, including wholesaling, buy and hold, and fix and resell over time, but for now I have a specific list of property criteria that I am going to forward to them, and that they should plan to research only properties that fit the criteria on that list. And I let them know I will email them a copy of my standard addendum that should be used with all offers unless I designate otherwise. In short, I control the direction the relationship is starting from and where it is going. It is amazing how frequently the agent, or anyone else, will accept your direction if you simply explain how you do business.
I use a similar approach with my cash buyers, and my property inspectors, etc. I let them know their role in the arrangements we are setting up, and explain how we do business. Any objections that come along, I always respond the same way: "Well, I'm reasonable and negotiable, let's discuss that." If their proposal is acceptable, or has legal precedent, I am willing to modify my arrangements, if not, then I will explain why it won't work, and go find someone else to work with.
There is no law in any state that specifies a minimum for Earnest Money Deposit, but there are some government agencies that have imposed specific policies that must be met.
And go from your strengths, an all cash offer is still a very strong position, and a short closing period is also very strong. Emphasize these things.
An interesting fact in the US is that the average real estate agent sells 6 properties per year. I tell my agents that we plan to do a MINIMUM of 6 transactions in the next 12 months, possibly a lot more. And I let it slip that for most agents that will double what they make in a year's time. It's funny how they suddenly value you a lot more when they realize that you are working hard to double their income for them.
I hope these little suggestions help you in posturing yourselves with the people you work with. I am not a pushy person, but I've learned to understand that what other people want most is to feel confidence that SOMEBODY has a well thought out direction and plan that will make good money and that they can harness themselves to that. And I script out whenever necessary what it is I plan to cover in a conversation, and practice it in advance.

Copy of a check only, they can't cash that and send them POF from besttransactionfunding.com and start making offers, I have made hundreds of offers and so can you.