I’d like to know what other agents and brokers do when a buyer contacts them and says they want to buy a home with all cash.

Asked by Jolie Muss, Upper West Side, New York, NY Sat Sep 22, 2012

The buyer wants them to set up appointments to show them places in the next couple of days (they aren’t available for open houses). They appear to have the money as their spouse owns a well known retail business in a nearby state (or alternately are a foreign buyer working and living here)

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35
Kawain Payne, Agent, Seal Beach, CA
Tue Sep 25, 2012
Hello Joilie,

I have had my share of the so called leads.

I tell them we need to have an in office new client intake meeting before I will begin showing homes. This meeting is key, because it gives me a chance to ask questions of them and gives them a chance to feel me out. I also make sure and ask them to bring me their proof of funds and documenataion of the source of their funds, and their driver's lic or passport. I take a copy of their ID and keep it on file. I must be able to verify they are who they say they are..


I even had one guy tell me he had his money in a volt in his house, he sais he was in a cash based business and did not DEAL with banks. He would not commit to a meeting, he just wanted me to start submitting offers on property subject to inspection. I diceided to pass on him as a client, his story just sounded a little scary to me.

Any one who will not commit to a meeting and provide me with documenation of proof and source of funds, are not buyers I choose to work with. I have my business model and standards and I will not comprmise on them. It is a matter of ethics and safety.

I NEVER SHOW PROPERTIES WITH OUT THIS CLIENT INTAKE MEETING.

Best of Success to you.

Kawain Payne, Realtor
4 votes
Linda S. Cef…, Agent, Franklin, WI
Tue Sep 25, 2012
You are very wise Kawain. We have lost one agent and several others were robbed and some that were up to no good were thwarted off and later caught thanks to the due diligence of agents like you that had the sense to know better and reported to our local board.

And by the way.............this happened in very, very nice areas. So know that crime has no neighborhood.

A serious buyer should have no problem showing you their documentation up front.
2 votes
Pat & Steve…, Agent, Westlake, OH
Mon Sep 24, 2012
I ask them for proof of funds in the same way I would ask a buyer for proof of amortgage loan pre-approval.
2 votes
Laura Feghali, Agent, Stamford, CT
Mon Sep 24, 2012
Hi Jolie,
You have some very good responses here and I'm in agreement that legitimate "proof of funds" are necessary when submitting the offer.
Do make sure that you perform your "due diligence" on the properties that interest your client to determine if there are any liens, back taxes owed, or environmental issues with the properties. And, do include an inspection contingency as part of the offer.

Good luck to you!

Laura Feghali
Prudential Connecticut Realty
2 votes
Carla Pennin…, Agent, Georgetown, TX
Sun Sep 23, 2012
It's my practice to ask for a pre-approval letter very early in a relationship with a buyer who will be obtaining a mortgage. Cash buyers are no different. John said it best below. Give them some information, show that you can be of service to them, then check out the letter from the bank before you invest any more time or get mixed up in something that isn't legitimate.

But if it's verifiable - High Five!! It shouldl be an easy transaction!
2 votes
Joseph Hasti…, Agent, Bayside, NY
Sun Sep 30, 2012
I believe anyone who has been in the business for any length of time would have heard something like this before. I certainly have. I do what I do with every customer. I ask them for an appointment in my office to discuss at length what they want and when they want it. This gives me the opportunity to ask them to bring in specific paperwork like Bank statements, taxes, etc. If they don't have a recent credit check our in house loan people will run a check as we talk. In short, I don't just start sending them listings for their consideration. I'm always glad to offer service but service does not mean servitude. A serious customer will easily do as requested. Besides that, as New York State actually requires we discuss and have the customer sign off on an Agency Agreement at first substantive contact, there is no way to do that without meeting as I won't just send out an attached copy.

Cash is nice but customers are frequently less than loyal. While I always offer honesty and fairness, they are to be kept at arms length. If that costs me a customer or two during the year, I'll deal with it.
1 vote
Annette Law…, Agent, Palm Harbor, FL
Wed Sep 26, 2012
Big, Big "THUMBS UP" to Kawain and Linda!

Constant vigilance.
1 vote
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Tue Sep 25, 2012
All of the purchase transactions I close are all cash deals, not one seller has ever accepted my offer to pay them with bananas.

Treat them just like you would any other buyer, show me the money!

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
1 vote
Judi Monday,…, Agent, Green Valley, AZ
Mon Sep 24, 2012
I explain to the Buyers that Proof of Funds will be required for any offer they submit and ask them to please provide it as soon as possible.
1 vote
Maria Cipoll…, Agent, Coral Springs, FL
Mon Sep 24, 2012
I normally explain to them that finding a property it should not be a problem, but before we are going out, I will need to make sure that they have the documents that we need to submitt an offer ready.

If they can stop by my office first, I can make copies and do the search of the property that they have in mind.

If they are willing to do that, they are serious cash buyers.

Maria Cipollone
Century 21 Tenace

http://www.Flahomespecialist.com
1 vote
Nest Atlanta…, Agent, Atlanta, GA
Mon Sep 24, 2012
First I say 'whoo hoo' (haha) then I usually meet with them to get a better understanding of what they are looking for. If it is a luxury home the sellers often want a pre-qualification letter or proof of funds before touring the home, so I request that the buyer provide a copy of one or both of the docs before going out to tour homes.

If it is a foreign investor I always ask for proof of funds from a US bank before we start our search. There are lots of international scams going on right now, so requesting the docs helps to protect your time and personal safety.
Web Reference:  http://www.NestAtlanta.com
1 vote
allan erps,A…, Agent, Pearl River, NY
Sun Sep 23, 2012
Make sure they understand that proof of funds will probably be required for any offers made & by all means get these Buyers whatever they need!!
1 vote
Annette Law…, Agent, Palm Harbor, FL
Sun Sep 23, 2012
First:
1. Jump with JOY!
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2. Have that meet up and get the buyer agreement signed. Buyers of this type WILL look at exotic purchases. Make sure to cover the compensation aspects with each purchase type.
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3. Show a few homes that meet their needs. You've demonstrated what you can do and should be willing to trust you. State they will need to have their proof of funds document for their price point submitted to you before the next scheduled showing to prevent losing an opportunity due to lack of supporting documents with their offer.
-
Remember, it's a business, not a hobby..
1 vote
John Souerbry, Agent, Fairfield, CA
Sun Sep 23, 2012
In most of the responses to your question, agents are recommending proof of funds in the form of a bank statement - we don't accept statements as proof. We require a letter from an officer of the bank stating that at least $X has been on deposit for at least 90 days. We then contact the officer independently to verify 1) that the officer exists 2) the officer is not related to the buyer 3) the content of the letter is factual. We've seen too many fake bank statements to trust them. This is how it was done years ago...
1 vote
Jacques Ambr…, Agent, Forest Hills, NY
Sat Sep 22, 2012
There's nothing wrong with asking for proof of funds. This is especially true if you are acting as a broker's agent or a sellers agent, then it is your job
1 vote
Janet Nation,…, Agent, Baldwin, NY
Sat Sep 22, 2012
I honestly have not asked for proof of funds until the appointed time, I believe them. So far so good. I rarely have cash buyers anyway but as John mentioned below, there;s nothing wrong with asking it's no different than asking to see the pre approval letter.
1 vote
Christopher…, Agent, Tarrytown, NY
Sat Sep 22, 2012
I treat them like any other buyer and qualify them, then make plans to meet.

Chris
1 vote
Linda S. Cef…, Agent, Franklin, WI
Sat Sep 22, 2012
I would ask them to provide you with the information from the bank or institution where the cash is held. They are going to need it anyway. I treat it almost the same way as a pre-approval or pre-qualification. And I am always suspect when it is cash. In our area, we have had people use that as an excuse not to provide any personal information to the agent only to find out they were up to no good.

Just explain that there are more and more sellers that are not even allowing showings unless the buyer has proof of ability to purchase prior to showing. Also, if they do find a great deal, they will want to jump right on it and most distressed properties require proof of funds or pre-approval to be submitted with the offer.
1 vote
Weichert Rea…, Agent, Bronx, NY
Sat Sep 22, 2012
Hi Jolie,

Make sure you get proof of funds (i.e. Bank statement, portfolio statement, etc...)

Hope this helps.

JOE GREENE
Broker/Owner

WEICHERT,REALTORS - House & Home
609 Kappock Street
Suite 1A
Bronx, NY 10463
(718) 432-5000 (Office)
(718) 432-2091 (Fax)
(917) 974-2600 (Cell)
http://www.WeichertWorks4U.com
joegreene@weichert.com
1 vote
Nicole Beauc…, Agent, New York, NY
Mon Dec 3, 2012
Before an initial buyer consultation (or during) explain that proof of funds will be required when offers are submitted.

As part of the initial package of information,I include a list of the most routinely requested documents for a purchase package and also the REBNY financial statement (which I also provide in electronic form for ease when they are working on this). I explain that even IF they are purchasing all cash, every asset that is stated as part of their net worth and liabilities statement will need to be substantiated, thus I am not being "invasive" but helping to ensure efficiency in the transaction- by beginning to prepare their documentation BEFORE there is an offer,by the time we get to the offer and agreed price- while the attorney's are working on the contract we are able to complete the boad package swiftly because they already gathered information and may be updating data as needed.
0 votes
Jane Lindsey, Agent, Bunker Hill Village, TX
Mon Dec 3, 2012
Me, I would show them what they want, making sure they know in advance that any offer will require proof of funds. If they find something they like and don't cough up POF, you can be done. I find all people do not want to give up their bank statements to someone they barely know. Get to know them first.
0 votes
Jennifer Fiv…, Agent, Red Hook, NY
Sun Dec 2, 2012
Yes a proof of fund is a must or else you could be wasting your time. Some use the cash purchase line to get you to take them out or worst yet a scam.
0 votes
Tasha Trice, Agent, New York, NY
Sun Dec 2, 2012
Hi Jolie,

I usually ask for proof of funds so that you are not wasting your time.

I hope this helps.

Best Regards,
Tasha Trice
646 926-0609
0 votes
Connie Mitch…, Agent, South Padre Island, TX
Sat Dec 1, 2012
Proof is in the puddin! Then go sell them a property immediately!
0 votes
Gail Pelto, Agent, Destin, FL
Sat Dec 1, 2012
Get their needs/wants details for their property, tell them that to write an offer for a cash sale, best to include a proof of funds letter from their financial institution, get that first,show them the 4 or 5 best properties that fit their wish list and then write the offer!
0 votes
James Furlong, Agent, Brookline, MA
Sat Dec 1, 2012
PROOF OF FUNDS - YOUR FIRST PRIORITY.
0 votes
Don Maclary, Agent, Virginia Beach, VA
Sat Dec 1, 2012
Start with a proof of funds and go sell them a house!
0 votes
We Buy Houses, Other Pro, Dallas, TX
Fri Nov 30, 2012
Jolie,

As a national cash buyer of houses, we can provide insight into the other sie of the equation.

With a network of thousands of investors across the US and Canada, http://WeBuyHouses.com is one of the largest cash buyers in North America.

Cash buyers are VERY different than a more traditional home buyer who might be financing the transaction.

When you have a client that has selected you to work with and is high net worth or a professional investor, asking for "proof of funds" is one of the ABSOLUTE WORST things you can do! Successful people expect to be respected with a certain level of customer service, and that type of interaction is disrespectful and sets the stage for a lack of trust.

Imagine you went to buy a luxury car, and as soon as you walked in and asked to test drive a vehicle, the dealer wanted to pull credit and see your bank accounts to verify you could afford the vehicle. I don't know about you, but I'd walk out of the dealership.

Certainly do some research (the Internet makes this very easy) to verify they aren't being deceptive, but if it's clear that someone is likely to be able to make a cash purchase, don't insult them by asking for verification.
Web Reference:  http://www.webuyhouses.com
0 votes
Actually when you go to a car dealer and ask to test drive, they ask for your drivers license. What do you think they are doing while you are test driving the car? By the time you get back, they will know if they have a good prospect or not.
Flag Sat Dec 1, 2012
Jolie Muss, , Upper West Side, New York, NY
Fri Nov 30, 2012
Great answers everyone! Having these answers on Trulia will be a great help to any real estate pro who needs to be more assertive in qualifying and also will help educate any buyers who might feel offended when asked to “put their money where their mouth is” ! LOL!
I can’t really choose a best answer- though I’m tempted to ask for a referral.. (Just joking)
Thanks so much!
Best wishes for the Holidays & the New Year to you all!

Jolie Muss
Licensed Real Estate Broker & Brokerage
"The Upper West Side's Buyer Broker"
331 Columbus Avenue, New York, NY 10023
Office: 212 721-3301 Email: broker@joliemuss.com
Website: http://joliemuss.com Trulia: http://www.trulia.com/profile/jolie
Twitter: http://www.twitter.com/jojomuss LinkedIn: http://www.linkedin.com/in/joliemuss
0 votes
Elena Ravich,…, Agent, New York City, NY
Sun Oct 7, 2012
At the first meeting I would explain that proof of funds will be required at the time of the offer , and that full financial disclosure and references will be required for most condo and all coop purchase transactions in Manhattan - this way they can start thinking ahead and get prepared. I would also watch their reaction and ask questions about sources of funds, etc...
0 votes
Judi Monday,…, Agent, Green Valley, AZ
Sun Oct 7, 2012
I always like to meet someone I don't know or haven't met before in a neutral area like my office first just to gauge how I feel meeting and talking with them. I will ask them to bring, in the case of a cash buyer, proof of funds and in the case of someone financing a deal, a pre-qual. Best of luck to you...
0 votes
James Furlong, Agent, Brookline, MA
Sun Oct 7, 2012
Yes to everyone - Proof of Funds + Exclusive Agency Agreement.
0 votes
Barbara Cart…, Agent, New Paltz, NY
Mon Oct 1, 2012
I would meet them and get a sense for the situation, I will ask for proof of funds explaining that it will be needed in order to submit an offer and that I will need it for my file. If they get me that...we are ready to go!
0 votes
Michael Cheng, Agent, San Jose, CA
Sun Sep 30, 2012
This happens all the time in my area. Buyers are coming over from Asia with cash and are ready to buy. After a quick call to schedule showings, I'm off and running with them. Sometimes those showings don't go anywhere as the buyers have unrealistic expectations and sometimes we close in 15 days.
Web Reference:  http://www.archershomes.com
0 votes
William Tong, Agent, Arcadia, CA
Tue Sep 25, 2012
The first thing you should do is give them my contact information. I'll be on the first plane from LA to NY. Just joking :)

Meet them face to face and treat them like any other potential buyer. Impress them with your local knowledge and find out what kind of propert they're looking for. Then tell them that when you guys submit your offer, a proof of funds will be needed. Get said proof of funds. Now you know if they are actually qualified.

Good Luck!

I would appreciate it if you picked my answer as the "best" :)

-William
310-256-3729
DRE #01903501
GoldenLandInc.com
Golden Land Investments & Financial, Inc.
0 votes
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