My Seller wants to see proof of funds

Wholesaling
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My Seller wants to see proof of funds

Tarek Wazzan
Wholesaler · Oklahoma City, OK · Member since 2012 · 53 posts · 24 votes

I called this guy to see if he would be interested in the property that i have under contract and he goes around my back and lies to my seller and tells him that i offered him the property for xx,xxx much. Anyways, my seller now wants to see proof of funds, he said he wants something like a statement? i don't know what to do. Help please!!

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J ScottPro Member
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Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
14y

Sounds like you weren't upfront with the seller about your intentions. Did you tell him you'd be paying cash for the property? If so, it's not unreasonable to ask for POF. Did you tell the seller you'd be looking for another buyer? If so, remind him of that fact in lieu of providing POF.

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    Welcome to BP Tarek!

    What does you contract say, was POF required to be given. Is you contract assignable? Do you have the right to seek financing? And, did you tell the seller that you planned to sell or was there a little white misconception presented?

    If you are under contract, then abide by the contract.....good luck

    0Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    14y

    I second what Bill said. If you have it under contract, and your contract states that you can assign it, I don't see a problem here. Find another buyer that has the cash & show his/her proof of funds. After that, find a way to get even with the guy that stabbed you in the back. Don't get mad. Get even. :0)

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    I would say everything should be fine as long as you are not trying to be someone you are not.

    Unfortunately I see a bunch of pretenders in this business trying to make a fast buck.Especially at wholesaling or assigning things.

    Did you put up non-refundable earnest money??

    As long as you didn't mislead the seller to get something under contract you should be okay.Can you close on this property absent obtaining a buyer to assign to??

    If you are buying for cash this seller should have asked for proof of funds before entering into a contract with any buyer.

    When I inquire with buyers on my sellers listings I ask the hard questions.

    1. Are you trying to assign this??
    2. Do you have a proof of funds bank statement showing cash balance to purchase this property valid within the last 30 days??
    3. Are you offering up non-refundable earnest money??

    I ask other questions but typically I lose many buyers after these first few.They weren't buyers at all but people pretending to be something they are not. A bonafide purchaser.

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    14y

    Sounds like you weren't upfront with the seller about your intentions. Did you tell him you'd be paying cash for the property? If so, it's not unreasonable to ask for POF. Did you tell the seller you'd be looking for another buyer? If so, remind him of that fact in lieu of providing POF.

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  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    14y

    In reality you can require the seller to adhere to the contract signed as they can you. I have found that this line is rarely successful.

    When negotiating originally you found the item the seller needed solved and you convinced them that the cost to cure their need wasn't outrageous.

    I personally believe that if you're able to negotiate once then you should attempt to do it again. There's nothing wrong with reworking terms. The key is to focus on their need and your honesty.

    Good luck.

    1Reply
  • Tarek Wazzan
    OP
    Wholesaler · Oklahoma City, OK · Member since 2012 · 53 posts · 24 votes
    14y

    this is my first wholesale contract that i have ever put and i'm really not sure if this wholesaling actually works. He wants me to show him that i have the money to buy the house (he already signed my contract). What would you do in my shoes? (and i do have some interested buyers, but the problem is the tenant leaves in two weeks and i can't show the house until they leave)

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  • Jason L.
    Developer · Carlsbad, CA · Member since 2010 · 21 posts · 4 votes
    14y

    You say you have a signed contract, but have you opened escrow yet?

    What does your contract say about when you will close? How many days?

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    14y
    Originally posted by Tarek Wazzan:
    this is my first wholesale contract that i have ever put and i'm really not sure if this wholesaling actually works. He wants me to show him that i have the money to buy the house (he already signed my contract). What would you do in my shoes? (and i do have some interested buyers, but the problem is the tenant leaves in two weeks and i can't show the house until they leave)

    I would find an experienced wholesaler in your area, tell him about the lead/deal and offer him 50% of the profits if he helps you out...

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  • Timothy Rogers
    Investor · Garland, TX · Member since 2010 · 99 posts · 92 votes
    14y

    @Tarek Wazzan wholesaling works. You have to be honest. I always tell my sellers, "I am a wholesaler that has a list of investor buyers and if we come to terms on a selling price...I can have your home sold within 3 weeks." I believe your buyer knew you were new to wholesaling. As a wholesaler you have to stay on top of the transaction until it close. Remember, you are the middle man for the buyer and seller and the seller only knows about you most of the time . So, you have to stay involve in the deal. Also, always ask for a nonrefundable deposit from the buyer if you have not done business with them.

    2Reply
  • Greg Nevarez
    Real Estate Investor · Waco, TX · Member since 2012 · 2 posts · 1 vote
    14y

    If you have an exit when entering a contract you should be fine. If they already signed the contract then they have to abide by the terms stated. If proof of funds is needed then you can with all respect tell them that you have a signed contract and that your holding up your end. Don't be intimidated with this just be patient.
    The remedy is simple: You have control of the property, not them; even though they still own it. The contract states that you now have interest in this property and you are in the process of purchasing and or assigning it to another buyer.
    Do not back out if it if you control it because ultimately you have a say so in what happens after you have it under contract.
    I would go through with the assignment and tell the owner politely that your partner is in the process of evaluating the criteria and that you should be able to close soon and if not that you will let them know by phone, email or certified mail carrier.
    Remember we put things under contract for control over things so be confident and complete the transaction.
    What is your exit strategy and where is your investor buyer.
    Answering these two simple thing will help to confidently close on this deal.
    Also if you can't close fall back on your exit strategy and let them know you cannot close.
    If you default and con not close or find a buyer then ultimately your going to breach the contract in which case the contract should already remedy the solution by the seller collecting earnest money that was given and excludes you from lawsuit. In which case you move on to another one and try it again.

    My name is Greg Nevarez and i am new to investing, but because of my training i know some of the complexities of being new to this line of work.

    1Reply
  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    14y

    Greg N.

    I certainly wish the investor well, however if he's asking the question he is then he may serious consider J Scott's advise.

    I learned a long time ago that just because you can doesn't mean you should.

    1Reply
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