Under Contract Again: When One Deal Fails and Another Comes Together
Wasn't that long ago that I was telling you about 15569 Legacy Way going under contract. My seller ended up voiding that contract after the buyer, who promised a quick settlement with a cash offer, would not even deposit the promised $5,000 earnest money deposit. Call me silly, but what do you expect from a cash buyer who won't show proof of funds and double talks any probing question.
"It would be silly for my buyer to have his cash in one location. And we all know that multiple bank statements don't qualify as proof of funds." What? Of course it would be proof of funds.
The buyer on that first deal was really in over his head and it showed. And if he was in over his head, his agent (also the buyer's wife) was drowning. My seller, wanting that fast settlement so much more than the offer he had in hand at the time, gave the buyer two days to show proof of funds after ratification. My stomach was in my throat when the buyer's agent said, "Send me a copy of the ratified contract. I need to send it to the bank." WHAAAAT? So I asked, "Why in the world does the bank need to see the conract? Is your buyer getting a loan or is this liquid funds?" The answer was more double talk from the agent/wife. "Oh, the bank needs to know what he is taking the money out for with the terrorist act and all." Hmmm. Generally, when you are taking out your own money, no one gives a hoot what you are doing with it. But when someone else's money is being used, say a hard money lender, they will want to know where their money is going.
Not surprisingly, that deal failed. When the buyer couldn't get the earnest money deposited due to insufficient funds, well, that's a clue. If you don't have $5,000, you don't have cash to buy a half-million dollar home. Time to move on and go back to the only buyer that was willing to show proof of funds with their offer. The same buyer who had been bumped by this numb skull. Good faith and no double talk. And thankfully, those second buyers hadn't found a home they liked as much in the meantime. And their agent had learned the lesson of not presenting a counter offer in a timely manner. We ended up on the market for only three days while the deal with the previously interested buyers was hammered out.
Still surprises me that buyer agents in our market don't ask for proof of funds from people claiming to be cash buyers. We will demand preapproval letters before wasting our time showing property, but no proof of funds. Maybe the experience my seller went through can get through to some that really find it distasteful and, as my dad used to say, noneya. None of your damn business. Well, if you are a seller, taking your home off the market for any buyer, you should have some assurance that buyer can consummate the deal. All of your assests are not the sellers business, just that you have enough liquid to do the deal.
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