"Is it necessary to include our financial statements (i.e. savings, checking, stocks, 401k etc) with the offer to purchase home?"
Most likely, yes. Assuming you are using the CAR Purchase contract, Para 3G requires the Buyer (or Buyer's lender/loan broker) to contractually provide a verification of down payment and closing costs within 7 days - so why not do this upfront to better position your offer?
Now, with a few caveats:
- As provided below, you should mask personal confidential information such as address and account numbers.
- You only need provide up to what you are providing as a down payment; however, it's not a bad idea to show additional financial capacity. I would provide as much financial documentation you need to remove doubt in your offer. In this regard it helps to have your Agent call the Listing Agent to get a feel for how many and what type of offers you are competing against (this could have quite different make-up depending on price point).
There are two primary "influencers" Sellers and/or their Agents focus on: 1) price and 2) perceived transactional risk. Price is self-explanatory; however, one needs to dig a bit deeper to cover perceived transactional risk.
From the Seller's perspective risk can come from many areas. The Buyer's financial wherewithal is material in the process of choosing which offer to accept because there are potential deal-killers in every transaction when money is tight, for example:
A) An appraisal comes in under the offer price and Seller refuses to lower the price and/or Buyer has limited funds to make up the difference.
B) A Property/Pest/Roof or other inspection uncovers active damage where the Buyer's lender or Buyer themselves want addressed (one of a few primary reasons Sellers should consider pre-listing inspections to increase marketability).
C) An upward interest rate shift removes the ability for your Loan Broker/Banker to provide you that Closing Costs Credit you were relying upon to make the offer.
Buyers need to appreciate Sellers are not really interested in having their property fall out of escrow because they (and their Agent) did not perform an appropriate level of due diligence for selecting an offer that has not been fully vetted upfront.
Bottom line: Communicating strong financial capacity gives the Seller an added reason to select your offer (and don't forget the comprehensiveness and professionalism of the offer package provides a clue to how the transaction will go with the particular Agent representing you, which is yet another "perceived risk" influencer).
"If the preapproval comes from a well known bank like Wells Fargo or Chase, wouldn't that be sufficient?"
In my opinion, ABSOLUTELY NOT! Please read the following two posts:
â€œPre-Qualified vs. Pre-Approved vs. True Pre-Approvalâ€
"Retail Banks vs. Mortgage Broker/Bankers"
Personally, I only work with Mortgage Broker/Bankers.
Good luck with your offer!