Sellers will request proof of funds as part of the contract offer, it shows the seller that a buyer has the means to perform and that they should be take the buyers offer seriously.
The strength of a buyers offer may in many cases dictate how successful the offer is.
The offer price most always will be the #1 consideration but sellers will absolutely look at the buyers ability to perform and that is where “Proof of funds” is crucial. A cash off is generally considered to be the most attractive option to a seller. Some sellers may even take a lesser price cash offer against a financed offer.
So what can you do to make your financed offer more attractive?
First of all you should have your lender pre-approve your loan application. Pre-approval is considerably stronger than a pre-qualification. In a hot sellers market, many sellers won’t even consider a pre-qualification – so be proactive and have your lender take your application through the approval process.
Something you will know that others might not.
With all financed offers, there will be a cash portion of the purchase payment. In addition to your pre-approval also supply your Realtor with a statement showing you already have sufficient funds to cover the cash portion. If you are making an offer on a property you anticipate that may come in lower that appraised value then show your cash reserves can also cover the shortfall needed to complete the sale.
This is an extremely important step that most buyers do not know will greatly improve their success in getting their offer accepted.
If there are several offers on a property or you are working to get a better deal, strong proof of funds can be the difference in the decision making process of which offer the seller will accept.
What do you need?
Ask your lender for a pre-approval and ask your bank manager for a document showing you have sufficient cash reserves to cover the liquid portion of the purchase. A redacted bank statement will also suffice if you are working in a tight timeline. Get these tools to your Realtor so they can work to give you the best chance at securing the vacation home of your dreams!
The Jerry Barker Group can assist you getting you pre-approval through our finance associates should we be representing you in the purchase of your vacation home.