The main purpose of the letter is to show that you have a lender that is willing to fund your purchase, this is not meant to keep your deal alive long enough to find a way to get it funded. There are too many educators advising new investors to go make as many offers as possible and then go find the money as someone will eventually lend it to you. If you are representing yourself as a “cash buyer” and you get the property under contract as a cash buyer, but your looking for a lender, many sellers and title companies will not let your deal close if you are bringing a hard money or private lender to the deal.
I believe you are truly putting your reputation at risk by getting offers accepted but not being able to close on them because you can’t get them funded. Don’t you think if you had a lender lined up, discussed what they can offer you, then get a proof of funds letter from them for an amount that you would qualify for beforehand would make things much easier for you?
There are 2 ways to make an offer – cash, which means you can provide a bank statement with the same name as who is on the contract showing proof you have the money to close, or financing, which you would provide the letter from the lender that has approved your financing to close this loan.
My suggestion is that if you are making offers you should include a financing contingency, and include a proof of funds letter with that offer. If you are getting a property under contract, and there is an addendum that asks for the “financing type”, I would always put hard money/private lender to ensure that you will have no issues if you are bringing financing to the deal. I’ve seen too many sellers recently taking a step back when asked to change a cash offer to a financing offer.
Remember –CASH MEANS CASH. If you are making offers and need a proof of funds letter to submit with your offer, get in touch with us today.