Proof Of Funds

· 2 min read
Proof of funds is a document showing a buyer actually has the cash they claim to have — and if you’re considering a cash offer,…

Proof of funds is a document showing a buyer actually has the cash they claim to have — and if you’re considering a cash offer, you should demand it before taking your home off the market.

What Counts as Proof of Funds

A valid proof of funds document is typically a bank or brokerage account statement, a certified financial statement from a bank officer, or a letter from the buyer’s financial institution on company letterhead. It needs to show the account holder’s name, the date, and a balance at or above the offer price.

The statement should be recent — within 30 days of the offer. A bank statement from six months ago doesn’t tell you much about what the buyer has today.

What Doesn’t Count

A screenshot of a bank app doesn’t cut it — those are too easy to fabricate. Verbal assurances from the buyer’s agent aren’t enough either. And a pre-approval letter from a mortgage lender is for financed offers, not cash offers. These are different documents for different situations.

Watch out for proof of funds showing money in retirement accounts (401k, IRA). Those funds often can’t be accessed quickly or without penalty. Liquid assets — checking, savings, money market, or brokerage accounts — are what you want to see.

When to Request It

Ask for proof of funds at the same time you receive the offer, or within 24 hours of it. Don’t wait until you’ve accepted and gone under contract. Your agent should include a proof of funds requirement in the listing or counteroffer language.

Some sellers request it before even allowing showings when dealing with investors or iBuyers. That filters out the tire-kickers early and saves you time.

Red Flags

Buyers who hesitate to provide proof of funds, offer documents from unfamiliar foreign banks, or show funds in accounts not in their name — all warning signs. Legitimate cash buyers expect this request and provide documentation promptly.

The selling guide covers how to evaluate cash offers and protect yourself during the sale process. Browse the glossary for related terms like cash offer and closing agent.