Profile picture for user968885

Why do I need to be preapproved for a cash sale?

I found a home on here that I am interested in. Upon further research, we found out that we need to be pre approved for a loan through a specific bank in order to purchase the home. The home is bank owned, and is less than 20,000. You cannot even get a loan for less than 20,000. I have the cash funds to purchase the home. My credit is not so good. Is there any way around this?
  • April 04 2012 - Waterford
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Answers (13)

You don't need a pre approval, you need proof of funds like a bank statement.
  • November 23 2013
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Profile picture for 800lbs In The Room
It is common practice for Banks to want to see the buyers ability to purchase their home before they accept an offer.
Since cash buyers are few and far between, the bank has a standard to  pre qualify buyers.

You just need to.... SHOW THEM THE MONEY!!!
  • April 15 2013
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Of course. Submit your offer with proof of the funds in your possession to cover the offer price.
  • April 15 2013
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Only proof of funds is needed.  The person said that a pre-approval is needed was on auto-pilot and made a mistake. Good luck!

Alysse
  • April 15 2013
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You should only need to provide proof of funds... Be sure you agents represents a all cash offer on the offer
  • April 15 2013
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I do not see why you are demanded to be pre-approved for a home that you wish to pay all cash.
All you need is either:
* a signed and dated letter of the bank with their corporate stamp stating that you have sufficient funds in your account to purchase xxxx streetname Dr in such city.
OR
* a copy of your bank statement showing you have sufficient funds to purchase the home + % of close of escrow, if any. Pls. make sure to blank your account number for safety purposes.
  • April 06 2012
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There is no reason at all to have to get pre-approved.  proof of funds is all you need!!  They (the selling bank) probably want all the buyers to get pre-approved from there bank.  If your cash then you don't need to :) Good luck~!
  • April 05 2012
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Hi User!!

If you're paying cash the bank will only require proof of funds, such as a bank statement showing you have enough money to pay for the purchase.  Make sure you white out you account number.

Good Luck!!!
  • April 04 2012
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Hi user968885,
Before you walk in with your briefcase full of $100.00 bills (like 200 of them) to buy a property there has to be what we can call "Greet and hand-shake". That is the process to make an offer to purchase the property and receive one of three possibilities, an acceptance, a counter-offer, or a rejection. 
For an offer to be credible it has to be back up with what is call "earnest money" (part of your down payment) and an assurance that you are able to obtain the remaining balance. For banks it is in their nature to talk of mortgages (or pre-approved in this case). But just as easily you can present a bank certified proof of funds (you got to have the money in the bank), and present your purchase offer to them.
Your knowledgeable real estate agent should be able to help you with all that and more.
Good luck with your purchasing.
Jaime Fernandez-de-Castro
[website deleted by Zillow moderator. Please see our Good Neighbor Policy]
  • April 04 2012
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All you need to do when writing a cash offer is have a letter from your bank, on bank letterhead, that says you have the required funds for a purchase of up to $20,000 or whatever the offer price is. If you feel comfortable with sending a copy of a bank statement (black out your account number) that's usually fine too.

I've worked extensively with bank listings and foreclosure buyers in my market. Just be clear to communicate you are paying cash and that you aren't using a loan.  

  • April 04 2012
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For most bank owned properties, a verification of funds works just as well as a preapproval. Good luck acquiring this property.
  • April 04 2012
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Profile picture for craigfial
No need to be approved as mentioned below.  Just show a copy of a recent bank statement showing funds and you are good to go.  Congratulations and good luck!
  • April 04 2012
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Profile picture for Pam Bava
You would need a letter from the bank verifying the funds. No need to to be pre approved if you are not getting a mortgage.  I hope you are working with a Realtor.

Good luck
  • April 04 2012
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