Q re: proof of funds

[Mark McDonnell]

Apologies in advance if this question has been addressed, or answered, elsewhere in the Forums. (If it has, I wasn't able to find such an answer.)

My wife and I are new to REI, doing some wholesaling in South Florida. We've been submitting our offers to purchase using the "as-is" FARBAR contract. We've ticked option (a) of the Financing clause, which reads:

"Buyer will pay cash or may obtain a loan for the purchase of the Property. There is no financing contingency to Buyer's obligation to close."

Our buyers to date have been solvent fix-and-flippers who have been glad to provide us Proof of Funds letters to facilitate deals. Their stock letter reads:

"To Whom It May Concern,

This is to verify that we have made an offer to lend [Our Land Trust], [Our RE Corp], Trustee up to $[XXX,000.00] at closing for the purchase of the above named property.

The loan will be for one year, interest only at [XX]% with a monthly payment due and payable on the first of each month.

This loan is subject to our usual property inspection, lien search, title clearance, signed documents and verification of insurance. We can usually close within 72 hours of title clearance.

The subject loan is to be backed by a first mortgage, and is contingent on the following:

The property does not undergo any changes resulting from fire, vandalism, collapse, other serious damage, liens, pending lawsuits, government restrictions, or acts of God. Loan is subject to final approval of the investor.

If any additional information is required, please feel free to call us at [XXX-XXX-XXXX]."

We've encountered on multiple occasions licensed sales associates, who, it seems to us, should know better, responding "Hey, this isn't a cash offer; it's financing-contingent, so if your lender up and dies Seller and I are out of luck;" to which we say, in essence, "Um, no; what about this doesn't look like a loan commitment? This is what is meant by 'hard money' in the first place. Freddie Mac accepts such a PoF; why not you?"

What's the "sticking point" here? Is this something you folks have encountered before? What's to be done about it? Is there a weakness in the wording of our PoF that triggers this reaction? Or if it's just that some agents are unfamiliar with the concept of hard money, what do you do to, shall we way, expedite their education on the topic?

Thanks in advance for your responses and suggestions!