If you’re planning to purchase commercial real estate in Key West or the Florida Keys, you are going to need a proof of funds letter. The sellers’ agent will make sure that no offer moves forward until a proof of funds letter is available to go along with the offer to purchase the Flordia Keys commercial real estate. This is different from any kind of pre-approval letter. The pre-approval letter shows that the buyer has been approved for a loan up to a certain amount. A proof of funds letter shows that there are enough liquidized assets for the potential buyer to actually close on the commercial real estate transaction.
What Counts As Liquid Assets?
You might have plenty of money invested in stocks and mutual funds, but these can’t be used for proof of funds. What if the market takes a nose dive tomorrow? Those assets will also drop. You have to show evidence of actual funds in a bank account that is readily accessible. They need to make sure that you have, at your disposal, funds ready to pay for the closing costs and down payment on the Florida Keys commercial property.
What’s Included In A Proof Of Funds Letter?
Your bank probably already has a template ready to go to provide you with a proof of funds letter. Even still, you should be prepared to wait up to a week for the letter to be provided to you, depending on the bank. Some are happy to give you the letter, signed by a bank official, right when you go in to request it. Others make you wait. Generally, the turn around time is less than two days though.
Your bank will know exactly what needs to be in the letter. They will prepare a letter on bank letterhead that shows your name and account balance. It will also include the name and signature of the bank official that processed the document.
What If You Will Be Using Multiple Accounts To Provide The Funds To Close?
If you don’t have all of the money in one account, you should consider moving money from multiple accounts into one. This will make it look more professional and it will be simpler for the seller. This is one way you can prepare in advance for purchasing commercial real estate in the Florida Keys. It’s so much easier to just provide one proof of funds letter for the value of one bank account than to submit multiple letters for multiple accounts. It’s not mandatory, but it is suggested.
What If You Don’t Have Proof Of Funds?
What happens if you don’t have the funds yet? What if your funds are coming from an investor who won’t pay you until the deal is done? This may or may not work out to your advantage. It is ultimately up to the seller. You can always try discussing your situation confidently to the seller. If they trust you, it’s up to them, ultimately. You can also try submitting a letter of intent from your investor (or investors) that shows that they are ready to invest in your business and how much they are prepared to invest. Of course, this isn’t a substitute for a proof of funds letter, because it’s not actually proving anything, but it can substantiate the likelihood that the deal will go through. It’s better than nothing if you can’t provide a proof of funds letter because you don’t actually have the funds yet.
RE/MAX Keys Connection
Upscale, Comfortable Commercial Real Estate Office
The RE/MAX Keys Connection office is located in the Historic Heritage House in the heart of Old Town, conveniently located immediately nearby major downtown hotels. Our unique, cafe-style real estate office offers our valued clients a welcoming, upscale, professional environment. Enjoy complimentary beverages, free wi-fi, and a private conference room or expansive front porch, depending on the level of privacy you’re most comfortable with.
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Experienced Commercial Real Estate Brokerage Company
RE/MAX Keys Connection’s owner and broker Curtis Skomp is one of South Florida’s top commercial real estate brokers. With over two decades of experience and a CCIM (Certified Commercial Investment Member) designation, Curtis has brokered commercial real estate including industrial properties, shopping centers, strip malls, trailer parks, bars, restaurants, hotels and multi-unit apartment buildings. Unlike many brokers, Curtis isn’t intimidated by bank foreclosures either.
RE/MAX Keys Connection offers clients international exposure with local service. Our service area includes Key West, Big Pine Key, Marathon, Islamorada, Key Largo, and all of unincorporated Monroe County. Our office is fluent in Spanish, which is highly important when doing business in Southern Florida.