"General Letter" included with cash offers?

[Michael Barnhart]

Hello BP! Has anyone been asked by their realtor that they need to submit a "General Letter" along with their cash offer stating that you have a private lender that will be funding the deal? I will have a Promissory Note signed to borrow the private money that will include all the details about the money and property as collateral but I'm just curious what needs to be included on this "General Letter." If someone has an example, that would be excellent as well! Thanks!

[Jeff Copeland]

They are most likely simply asking for proof of funds. If you don't have the actual cash, and you're using hard money, that's fine. But your hard money lender should be able to provide a letter, along the lines of "We have underwritten the deal at 123 Main Street and are prepared to fund up to $_____ for Mr. Barnharts's purchase of this property. The funds are readily available we we can be ready to close in 10 days" or whatever.

Your realtor is probably just calling it a general letter in the sense that it is not a pre-approval letter (which you don't typically get with things like hard money, private lenders, or commercial loans). It's just a general letter (literally) from your hard money lender stating they are prepared to fund the loan. This, plus proof of funds from you for the down payment, should suffice.

The promissory note comes much later - you will sign that at closing. The seller wants to know up front that you and your HML are good for the cash.