We raise $ from private lenders and were wanting to take it a step further by making our offers on Houses with the check being the full price of the offer we are making. Say, asking 160K we offer 120k in the form of the earnest $ check.
The issue I am running into is escrow of course won’t write a check even once they have the $ there in their escrow account.
The TPA of the Private Lenders IRA can do it with a lot of tedious steps like the DOI and Promissory Note filled out before they would issue the check. Then, we would have to get them to change it if we got a counter offer and was a little higher.
What creative way is there that someone here may have used??
Thank for your time!!
I’m not sure too many people here followed what you were saying. An all cash offer would probably be treated the same whether you included all the money in the initial offer or at the close. Either way the seller doesn’t get the money til closing so it shouldn’t matter.
The only real advantage is that they don’t have to wait 6 week or more for the money if you already have it. You’d probably still just do a home inspection, then the P&S and then close a week later or whenever the attorney/title company can schedule it. So maybe two weeks if everything is in order.
The escrow for the listing agent is really there to hold their commission. That’s why you typically offer 5-6% total with the P&S. When it closes, they just move the money into their regular account and pay the commission out of that. You also typically don’t earn any interest when it’s in escrow so why would you want to put that much money in there?
Hola and thanks!
The advantage I have heard of out east…I’m in CO was that in making the offer to a bank if REO and to the seller if FSBO…maybe not as effect with MLS listings!? …The 120K check holds more clout than say a 1K check. What I have read is that the percentage is more in your favor in getting the offer excepted . Call it psychology, it seems it would work and if I have that $ available, why not use it to my advantage. it will be the same offer I would make with a 1K earnest $ check as if I just write the check for the offer price I am making…in this case 120K.
it shows you are serious and CAN close and not just some maybe buyer. As you know, a lot of folks we default in going thru thr traditional loan process and the seller and realtor will have wasted time and may have taken house of market. If I saw a full check for their offer, I would take that person more serious and may help me make a decision of WHO to sell to.
Here in CO, I have talked to 3 title companies I work with (I’m a experienced mortgage broker as well) and they told me they DO offer interest bearing accounts if I were to have the funds transfered from my private lender in advance to close quickly…7 days. I hear it is up to 4%…but that is still hear say til I see it in writing.
Anyways, my whole point is to make my offers stand out with out of course offering asking price…I make 10 offers a week…and do have the funds to cover All those if excepted…but that may take all karma working together to get all my offers excepted at 80% ARV minus repairs:) I don’t go after pretty houses and the seller should except below market for a house in need of repairs to bring back to neighborhood remodeled standards.
My team of realtors agree it would be more clout as well. And they understand volume and not a one trick pony that most new realtors who go after REI’s learn the hard way.
Summed up: it is either having funds transfered early to a separate LLC interest bearing account I can set up…or going thru the tedious TPA paperwork and verifying it that way.
Loss Mit at banks have told me that it would stand out in their mind as well seeing the full check setting their and would help them make a decision. I know there is a way:)
There is a very popular REI that most would know that I read he does it for short sales and they have taken his offer over higher ones of local rei he later found out because he assumed ( I know we shouldn’t assume be we all do it:)) it was because of a check for full price of his offer and not just a 1K check like everyone else.
It’s like that saying, you got it use it:) (with moderation:))