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We are presently prepping our present house for sale (already have a realtor lined up; she helped us find our present home), and have traveled several times to another state where we already decided we want to move. In the past few trips we've traveled pretty much the length of the state (thankfully it's small), and have narrowed our sights to 2 separate areas. We have a rather 'tight' wishlist of what we want in our next/last home (land, age/style of house, definite no-nos of condos, lack of elbow room with regards to neighbors, etc) which the realtor told us makes his job much easier.
We are planning a vacation/house-hunting trip in the next few weeks, and have already interviewed 3 and decided on one realtor who is experienced with long-distance relocations. Our next purchase will not be contingent on the sale of our present home since we plan to purchase our next home as a cash sale. We have funds already liquid in 2 separate accounts.
Part of me is very uncomfortable providing a Proof of Funds letter from our bank which shows the amount of funds since we already have a small list of homes we would like to see (if they are still available) that range from the low 200K to close to 450K. Since this will be the possibly ONLY time we buy without needing a mortgage, and want to negotiate a little depending on what an appraisal shows (we wouldn't low-ball an otherwise fair price), can we have our bank provide a Proof of Funds letter that shows a different amount than what is in the bank (as in what we would offer, plus a bit extra)? It will still be an amount which is already in the bank, liquid, but not the total amount.
This is all new to me/us, so hopefully my question won't offend anyone.
This is not a question that is at all unusual nor is it particularly difficult. The easiest thing to do is talk to the "personal bankers" at the various places where you have accounts. They can outline their standard approach to this sort of thing and it is easy enough for them, when they know ahead of time. to prepare the kinds of "summary of funds availability" that reveals only the info you are comfortable sharing. It is quite common to use language in preliminary letters that merely states "as of DATE the accounts of PARTY are sufficient to cover a purchase of $XXX,XXX" and these can be sent electronically. When the deal is struck the buyer will instruct their bank of the closing time line and typically the title company will arrange for transfer of funds in such a way that the account info remains confidential.
At the relatively modest price points you are considering these things are more a formality than a deal breaker; when folks start looking at higher priced homes the concern from the seller and their agent is they do not want to expose themselves to potential scammers and then the seller's bank is often involved in an inquiry.
Of course even if you have cash you could still work with a friendly mortgage broker who would draft several semi-generic letters that you are "pre-qualified" for a home of up to $XXX,XXXX and this too is something that is rather more formality so that the agent does not feel that you are "wasting their time". With a friendly mortgage broker you would be under no obligation to actually finance the purchase through them, but they do like the exposure to real estate offices...
Thanks for the quick answer, Chet! I already checked with our bank, and they also said that getting a letter wouldn't be a problem. I just wondered if - depending on which house and what price range we want - the letter could be customized so we don't show the entire account (I'm frugal and the moment we close on our next/last home, those extra funds are going right into investment accounts...)
Get a letter that is written for the particular address you are making the offer on. It does not need to include an amount at all if you are still negotiating that. It can read something like "momtopets is verified to have adequate funds in her account(s) with us to cover the proposed purchase price of the property located at address."
Hopefully your bank can act quickly when you request a letter. If they can't... then perhaps a more generic version could be written, but the more current and tailored for the offer, the better.
I super heart your answers - part of me knows that this a 'duh' question, but since this is such a unique (for me and my spouse) situation, I want to be sure that something so basic isn't FUBAR'd The bank is local both where we live and where we want to live, so finding a branch won't be difficult.
Now, the hard part is getting our present house cleaned...seriously, HOW does a house look like a barn when it's only the two of us?
I would not trust any old "bank employee" to do as you wish -- they often are trained to stick to "bank procedure" and what you want may not be "the standard".
The "not so secret work around" is to call the nicest branch closest to the most affluent town where they have a location, even that means a bit of drive. Make an appointment with the "personal banker" and tell them EXACTLY what you want the letter to say. Generally the more affluent areas have more demanding customers and the bank staff is more accustomed to those customers being LOTS more specific about their finances...
Just realize that you will not have to provide this letter until you have an accepted offer and the title or escrow company starts to work on your purchase. If for some reason the Seller is not comfortable without such a verification, then you could do as Diana Holbrook above says and get a more generic letter written.
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It would be very easy to open another account and put some of those funds there, so the bank would not be asked to compromise their policy/procedure. I once was in a similar situation while buying a car, and had the credit union write the letter for less than I actually had, not a problem because I just asked them to verify that I had the amount I wanted to pay, not my balance.
In our part of the country, we try to include these letters with an offer.... but the more I read here, the more I realize just how different customs are in different parts of the country. Do what is normal in the area you're buying in! Your local realtor should know.
As for keeping the house clean.... that's a challenge, no matter where you are.
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