"Proof Of Funds Or Prequal Letter" - Is This A Filter?
I've noticed on the local mls site that some of the lender owned properties state that all offers must be accompanied by proof of funds or a prequalified letter.
Is this just to discourage newbies trying to apply creative real estate techniques or can the lenders actually require this?
Thanks
It separates the serious from the not serious. When dealing with banks and the price vs. terms argument, it is my experience that you are more likely to get a dirt cheap offer with no inspection, financing, or other contengencies than a higher principal with creative terms. This is likely due to the fact that banks are not in the business of owning properties and would like to get them off the books as fast as possible.
With a small, local bank, the preceeding may not be as true.
In my limited experience with bank owned property, they only want to deal with principles -- not middlemen.
Banks will not let you assign the contract either. If you can't prove to the bank that you have the funds to come to the settlement table, you are wasting your time.
They can and do require proof upfront. Many Asset Managers won't even review an offer until it includes the proof of funds or pre-qual letter.
As for creativity, REOs are fairly straight-laced. Seller paid closing costs are about as wild as it gets.
And, even with the "filters", we still receive a lot of junk offers that just stand NO chance of being accepted.
All in a day's work, I suppose...