If you’re selling your home, one of your biggest concerns is whether a buyer can actually follow through on their offer. Will they really have the money to close? Or are you about to waste valuable time with someone who can’t deliver? That’s where a proof of funds letter comes in. While some sellers wonder if it’s “weird” or too aggressive to ask for one early and up front, in reality, it’s a standard step that helps you separate serious buyers from those who may not be financially ready — or an overly optimistic buyer who may be all talk and no trousers. In this post, we explain the proof of funds letter from a seller’s perspective, and how it can give you peace of mind before you commit to a deal.
A proof of funds letter is a document from a bank or financial institution verifying that a homebuyer has sufficient cash available to cover the purchase price if paying in cash, or at least the down payment and closing costs if financing. Also known as a POF, this letter can help assure you and your agent that the buyer has the financial capability to complete the sale, especially if it’s a cash offer or when a strong cash position can give a buyer an advantage. When you accept an offer, you’re taking your home off the market and investing time and energy in the closing process. A proof of funds letter helps protect that investment — and your time. It verifies that the buyer truly has the ability to close, cutting down the risk of last-minute surprises and a pending home sale that falls through. It also shows that the buyer is serious and prepared, which can help you prioritize their offer over others. For cash deals, this step is even more critical. Without a proof of funds letter, you could spend weeks waiting on a buyer who never actually had the means to purchase your home. The safest time to request proof of funds is before you formally accept an offer — meaning you have not yet signed the purchase agreement. That way, you’re not committing to a deal until you know the buyer has what it takes to close. In competitive markets, some sellers — with guidance from their agents — may ask for proof of funds even earlier, such as before showings or when reviewing multiple offers at once. Far from being “weird,” this up-front step saves time and weeds out buyers who aren’t ready.What is a proof of funds letter?
Why proof of funds matters to home sellers
When should sellers ask for a proof of funds letter?
