Hard Money & Credit Line Advisory
It is common for buyers to state that a hard money loan or credit line, without a financing contingency is “the same as cash”. Our clients do not agree.
If you do not have all of the funds to pay all cash without obtaining hard money or credit line financing, then your ability to close the escrow is subject to the performance of a third party, your lender. Even if you have no written financing contingency, you still have an unwritten contingency, as you can’t close the sale without the lender's funds.
An offer without a financing contingency only establishes that the buyer would be in default of the terms of the purchase agreement if the lender doesn’t fund their loan. Not having a financing contingency does not guarantee that your lender will fund your loan, and that you will close the escrow. No matter how many times you have used the lender in the past, or how great they are, or how terrific you are, until your lender places their funds into the escrow you have an unwritten contingency, as you can’t close the sale without the lender's funds.
Our client’s preference is that hard money and credit line buyers submit proof of cash funds available to show that they have the ability to close the sale in the event their hard money or credit line financing is not obtained. If you are unable to show that you have the ability to pay all cash, then we recommend you provide bank statements to show as much cash funds as possible to assist us and our client in evaluating your offer.
If you provide no bank statements to show us otherwise, it will be deemed that the buyer has no funds of their own, and will be unable to close the sale without obtaining financing for 100% of the purchase price. You should expect your offer will not be accepted. This is true even if your approval letter states that you have been approved for several million dollars of financing, and even if your offer is the highest price offer received.
Note: The only acceptable proof of funds is an account statement in the name of the buyer, for the most recently ended statement period. Screenshots are unacceptable.
It is common for buyers to state that a hard money loan or credit line, without a financing contingency is “the same as cash”. Our clients do not agree.
If you do not have all of the funds to pay all cash without obtaining hard money or credit line financing, then your ability to close the escrow is subject to the performance of a third party, your lender. Even if you have no written financing contingency, you still have an unwritten contingency, as you can’t close the sale without the lender's funds.
An offer without a financing contingency only establishes that the buyer would be in default of the terms of the purchase agreement if the lender doesn’t fund their loan. Not having a financing contingency does not guarantee that your lender will fund your loan, and that you will close the escrow. No matter how many times you have used the lender in the past, or how great they are, or how terrific you are, until your lender places their funds into the escrow you have an unwritten contingency, as you can’t close the sale without the lender's funds.
Our client’s preference is that hard money and credit line buyers submit proof of cash funds available to show that they have the ability to close the sale in the event their hard money or credit line financing is not obtained. If you are unable to show that you have the ability to pay all cash, then we recommend you provide bank statements to show as much cash funds as possible to assist us and our client in evaluating your offer.
If you provide no bank statements to show us otherwise, it will be deemed that the buyer has no funds of their own, and will be unable to close the sale without obtaining financing for 100% of the purchase price. You should expect your offer will not be accepted. This is true even if your approval letter states that you have been approved for several million dollars of financing, and even if your offer is the highest price offer received.
Note: The only acceptable proof of funds is an account statement in the name of the buyer, for the most recently ended statement period. Screenshots are unacceptable.