Proof of Funds Needed in Order to Show Home
Well this is a first…a note in the MLS that proof of funds (POF) was required before a buyer could be shown a home (a short sale).
Now granted a proof of funds is important. We see requests for them all the time on REOs and short sales, and itmakes sense to provide them upfront rather than waiting to be asked IMO.
It’s also certainly important in a cash transaction to know that the buyer does have the financial wherewithal to purchase the property and to demonstrate this to the seller when submitting an offer. Our contract in CA specifies that verification of down payment and closing costs should be provided within 7 days of contract acceptnce (unless negotiated otherwise) by buyer or buyer’s lender.
It’s also not uncommon for proof of financial qualifications to be provided in advance when showing multi-million dollar properties. If you are showing a client a $20M home the seller, and Listing Agent, like to know the buyer is qualified to purchase, either by cash or other means before they open the doors.
But I’ve never seen a POF as a requirement for showing a home priced in the $200s. Submitted with offer? Yes.
Quite frankly I don’t think my client’s financial information in the form of a proof of funds is the Listing Agent’s business until we decide we are moving ahead. Nor the client’s name for that matter.
I do understand that often there are parades of people being escorted through homes by buyer agents who perhaps are not as concerned as they should be about their client’s financial credibility - that's a waste of several people's time. And the Listing Agent wants to avoid wasting the seller’s time perhaps. But at first blush I find this troubling.
Sure I want to know my client is pre-approved but I don’t ask for a proof of funds before I show property (although if they are cash buyers I will ask for more information and details). I do when submitting a cash offer or offers on REOs and Shorts.
And I off base here?
What are your thoughts, pro and con? Is this a wise precaution or an unnecessary requirement?
I guess “show me the money” is taking on a new meaning in today’s market!
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