Jeff’s Carlsbad Blog for First Time Home Buyers


Do You Have Proof of Funds?

Posted in Financial,Offers by Jeff Dowler on April 27, 2010
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Proof of funds (POF) can be an important component of your offer.

If you are a buyer with a down payment, it may be in your best interest to submit an offer with proof of funds. While this may only be required in the case of REOs and short sales as we see here in Southern California, I think it may be in your best interest, and make your offer more competitive, if you include a copy of a bank statement or other record (black out those account numbers) to prove you have the funds for the down payment.

If you are a cash buyer this is pretty much a MUST DO part of your offer.

Your state contract may require this, as ours does, after offer acceptance, but why not show your interest and your financial capability to the seller up front.

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All content copyright © 2010 Jeff Dowler “The California Relocation Dude”

What is POF (Proof of funds)?

Posted in Financial,Offers by Jeff Dowler on January 13, 2010
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If you are buying a home these days, especially a short sale or REO (foreclosure), you will likely be asked to provide PROOF OF FUNDS (you may see this as POF in MLS listings).

Just as the seller wants to see a pre-approval to know you are qualified to obtain a loan, a seller (and almost always the bank) wants PROOF that you have the money for the down payment, or for a cash purchase. This can be copies of your bank statement (as recent as possible), your mutual funds statement, or similar. Be sure to block out your account numbers when providing this to your agent to submit with your offer.

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All content copyright © 2010 Jeff Dowler “The California Relocation Dude”

What You Should Know About the Offer to Purchase

Posted in Offers by Jeff Dowler on September 2, 2008
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This is a reprint of an article I wrote some time ago for buyers on my ActiveRain blog. There is lots of good stuff there, too, for buyers, including information about San Diego communities and housing in general.

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Buying a Carlsbad home, or a house elsewhere in North County, means using the standard California Residential Purchase Agreement and Joint Escrow Instructions (a.k.a. RPA).

It’s an imposing document, especially for first time buyers. The standard document is 8 pages of single-spaced contract language, so for someone who has not done this before it CAN be intimidating.

There are critical decisions that YOU have to make along the way.

But here are some hints to get you through the offer process. However, the intent is NOT to review everything, since you need to do some of the Q and A stuff with your trusted Buyer Agent (you DO have one, don’t you? Someone to represent YOUR fiduciary interests?).

There are some KEY DECISIONS you will need to make (but NOT an exhaustive list), so knowing about these in advance will give you some time to ponder the issues, and give some thought to what you might want to do with regard to these matters.

  1. Purchase price– obviously this may be THE MOST IMPORTANT issue you have to decide. Give this a lot of thought. And make sure you talk with your buyer agent to review the comparable sales so you can develop a strategy. This can, and will likely be, a major point of negotiation with the seller.
  2. Initial Deposit– how much are you going to put down as a deposit with the offer, i.e., your good faith down-payment. Not everyone has money but not putting down a deposit will make your offer very weak and a concern to the seller.
  3. Loan Amount– how much are you going to finance? This will depend on your down-payment and how much you are qualified to borrow. If you have not gotten pre-approved, do it NOW!
  4. Balance of the purchase price– if you have other cash you will contribute in addition to the deposit and the loan, you need to indicate that. Some folks only put down the down-payment and the balance is financed.
  5. You need to provide verification of your down-payment and closing costs, in writing, normally within 7 days.
  6. Loan contingency – unless you are a cash buyer, your offer is probably contingent on getting a loan, and you will need to obtain approval of your loan within a specific period, typically this is the standard 17 day contingency period (but negotiable).
  7. Closing date and occupancy – when do you plan to close and obtain occupancy? This can often be a critical date for the seller too. Be prepared to negotiate the time frame.
  8. Costs associated with the purchase – there are a series of questions about costs for which you must decide (or propose) who is paying for what. Some of these are traditionally the seller, some are the buyer’s, and some are shared. These include things like the inspection, wood destroying insects inspection and damage remediation, other inspections, natural hazards report, escrow fees (usually split 50/50 but again this is negotiable), transfer taxes, HOA transfer fees, home warranty and more.
  9. Issues relating to statutory disclosures
  10. Items to be included or excluded – things like appliances
  11. Sale of your current home contingency – will not apply if you don’t own a home or can buy a new one without selling your current one.
  12. Contingency Period – the standard period during which you much review all the disclosures, have your inspection, obtain your loan and more is 17 days, but is a negotiable time period. You will be expected to remove ALL contingencies by the end of the agree-upon time frame.
  13. Liquidated damages – if you default you may be subject to loss of all or a portion of your deposit. This can be limited to 3% of the purchase price depending on the conditions.
  14. Dispute Resolution – in the event of a dispute, you might agree, with the seller, to go through arbitration in order to resolve the issues.
  15. Miscellaneous Terms and Conditions – maybe it’s a short sale, or there are other terms you want to include
  16. Expiration of Offer – how long will you give the seller to consider and respond to your offer. Without a specified date, the default is 3 days.

There you go…a pretty good list of the things you need to consider in the offer process. Not an easy task, and there are some important decisions you will need to make. A qualified, knowledgeable REALTOR is your key to success here.

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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.

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