Active Rain May 6, 2011

How To Render Cash Offer Useless

We have had the good fortune to receive some cash offers submitted on company listings recently. Cash is nice; no mortgage, no appraisal, no banks, and fewer headaches. Agents who submit a cash offer have every right to be enthusiastic and upbeat about it.

However, there is a peculiar trend among cash offers which perplexes me, and consumers should understand this if they are in a position to make a cash offer.

A Cash Offer without proof of funds is toothless.

On more than one occasion, I’ve had these offers submitted sloppily with sparse terms and no proof of funds. In one instance, the agent submitting resisted the need, saying that once we have a meeting of the minds that proof of funds would be provided. This is about as logical as offering a wood stove a log as soon as it gives off some heat.

The idea that the buyer is some CIA operative or secret celebrity is foolish. The truly affluent often buy in a corporate name. What’s the big secret? Do you think the seller cares who the buyer is if they bring cash? All this nonsense about privacy does not preclude the basic protocols of business and good faith. It’s just a silly annoyance.

Sellers want to see the money in the account. You can black account numbers if you wish, but the benefits a cash offer give the buyer cannot be enjoyed if you cannot furnish proof that you are in fact a true cash buyer. Once an offer is accepted in principle, I have certain responsibilities of disclosure to other perspective buyers and if a bona fide offer is scared away because of an impostor, my sellers could suffer financially. That isn’t cool, and it isn’t good faith. It is subterfuge.

It takes 3 minutes to photocopy a statement or print something off your online account. You black out sensitive information with a sharpy and you are ready to do business. Consumers, if they want the best chance of getting  the deal, should insist that their agent provide their proof of funds if they want the deference that cash terms often enjoy.

My sellers will not respond to offers without proof of funds. Buyers should understand this, and act accoordingly.