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Anyone with experience in short sales and REO's know the bank requires proof in writing that the buyer has the necessary funds for the purchase of the property. If the buyer is paying cash I have always advised them to obtain a letter from their bank stating they have the necessary funds for the transaction.

In a recent short sale where I had the listing, the buyer submitted a letter from his bank signed by the Vice President of Banking which included his contact number and email.

Short Sale Proof of Funds

The negotiator with the bank would not accept the letter as proof of funds and asked for a copy of the buyer's account statment. His reason was the wording "access to cash currently on deposit". He said the buyer could move these funds from this account into another account at any time. I responded by saying the buyer could still move funds from an account after he gets a copy of the bank statement. He simply said "A bank statement would be different".

I understand an actual copy of the bank statement is a harder proof of funds, but if there is any issue, the negotiator could call the Vice President and get clarification. If the letter was truly a fraud then what would be the end game? Not closing? I don't understand why banks are making the process more difficult than it has to be. In this case, it ended up being an acceptable offer and went to closing.

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I sell a lot of of Probate and Trust sales. They are not quite like a traditional sale, but not as unlike a traditional sale as a Short Sale or Foreclosure. One of the differences are disclosure obligations. In California one of the diclosure requirements that causes the most confusion is what happens about the Natural Hazard Disclosure Report and statement. It is simple:

As per the Trust Advisory or Probate Advisory that needs to be signed in each of these transaction the Trustee in the case of a Trust, or the Personal Representative in the case of a Probate, is required to provide a Natural Hazard Disclosure report, but is not to sign the report.

The most common request I have with these sales is for the Trustee's signature on the Natural Hazard Report. It is not an oversight that it was not signed, it was on purpose.

If you have any questions about trust or propabate sales in Santa Clara or San Mateo Counties, please feel free to ask me.

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