Newbie Buyer Question

I just began working with a cash buyer who is very “old school.” He claims that he is uncomfortable providing me with a proof of funds letter. He would rather I locate a good deal and then call him once I find it. He will then come with check in hand. My instinct is telling me to move on. I have advised him that it might be a good idea to open an escrow account in which to deposit the his money, so that I would have the funds available on hand to submit offers, but he refuses to provide me with that info. Also, what is a good earnest deposit amount in California? I have been advised $5000. Also, I have been working closely with a Realtor whom I trust to write up my offers. I’m not sure how she gets her commission. Also, how do get my option fee if I am working with a cash buyer.

For a proof of funds, try or a similar hard money lender website that will let you print a proof of funds letter. When you submit your offer you would submit it as a private loan financing, not a cash offer. To submit as a cash offer, you would need to have a bank statement or similar showing the cash amount in your name.

As a wholesaler, if you are putting up a $5k EMD, you would need to be very sure of your exit strategy.

When your real estate agent writes and submits your offer, he/she would be named as the buyer’s agent. When you assign your contract, the realtor becomes the buyer’s agent for your end buyer, as stated in the contract. S/he would get paid the commission just like in a regular transaction.

If you are using a realtor, I assume you are looking for deals on the MLS. I am in the DC metro market, and the MLS is very competitive here. Is it the same where you are?

Just to add my 2 cent’s… I would also find other cash buyers that are seeking deals. The fact that he won’t provide you a POF (Proof of Funds) would make me question if he really has the funds?? Just saying you don’t want to be caught with a great deal and no buyer… Also might want to check into and get approved yourself. Always have 3 ways to fund a deal. Rule #1 in Real Estate BUYERS ARE LIARS!! Not saying this to discourage you in anyway shape or form just CYA!