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Old 09-20-2011, 08:15 PM
 
57 posts, read 143,017 times
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My parents are selling the house they've lived in for 20+ years. The house is totally paid off and are simply looking to downsize. They plan on selling their house and purchasing a condo in cash. The real estate agent is telling them they must be pre approved for a home loan, despite planning on paying with cash. Does this sound right? What are the reasons behind this?
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Old 09-20-2011, 10:12 PM
 
4,567 posts, read 9,241,309 times
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No. Agent is dumb. Tell the agent to write up the purchase and sales or you will give it to another agent. The seller is the one who approves the deal, not the agent. Its not a bad idea to include a proof of funds statement from your bank account.
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Old 09-20-2011, 10:22 PM
 
Location: Martinsville, NJ
6,162 posts, read 11,827,898 times
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Quote:
Originally Posted by jdougal View Post
My parents are selling the house they've lived in for 20+ years. The house is totally paid off and are simply looking to downsize. They plan on selling their house and purchasing a condo in cash. The real estate agent is telling them they must be pre approved for a home loan, despite planning on paying with cash. Does this sound right? What are the reasons behind this?
They clearly don't need a preapproval. But they do need to prove that they can afford to pay for the house somehow, and perhaps the agent is simply asking them to get the preapproval as he sees it as the quickest way to demonstrate the ability to purchase. Is it your parents BUYERS agent telling them they need a preapproval, or is it the listing agent on a place they want to buy? Either way, the agent is incorrect. If it's the listing agent, they need to deal with him & show him where the funds are actually coming from. If it's a buyer agent they are considering working with, they might want to reconsider, as this guy is clearly not understanding things properly.
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Old 09-20-2011, 10:48 PM
 
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Agent: My boss said always get pre-approval.
Buyer: But im paying cash
Agent: Does not compute. You must get pre-approval.
Buyer: LOL.
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Old 09-21-2011, 04:58 AM
 
82 posts, read 268,166 times
Reputation: 71
They're probably asking for pre-approval now since their current home hasn't sold. If they have funds in place, they just need to show a bank statement.
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Old 09-21-2011, 07:05 AM
Status: "Enjoying the winter" (set 3 days ago)
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,885 posts, read 61,625,454 times
Reputation: 37760
If they are house hunting before selling the old house they will need to qualify for a loan, since it's unknown whether the sale will result in enough to buy the new home. If they sell it first then do a double move and have cash at the bank they will need only produce a letter from the bank, perhaps even just a statement showing the balance.
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Old 09-22-2011, 06:24 AM
 
Location: Phoenix, AZ > Raleigh, NC
16,781 posts, read 21,779,390 times
Reputation: 27928
Quote:
Originally Posted by 399083453 View Post
No. Agent is dumb. Tell the agent to write up the purchase and sales or you will give it to another agent. The seller is the one who approves the deal, not the agent. Its not a bad idea to include a proof of funds statement from your bank account.
They won't have a proof of funds statement because they won't have the funds until they sell their current house.
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Old 09-22-2011, 06:44 PM
 
4,567 posts, read 9,241,309 times
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Originally Posted by Jkgourmet View Post
They won't have a proof of funds statement because they won't have the funds until they sell their current house.
The poster didn't specify if they have the cash now, or will have the cash after selling the house. I assumed they already had the cash.
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