Why should the seller ask for proof of funds before

Proof of funds and mortgage expectations

It is easy to confuse the proof of funds with a mortgage advance letter, but each letter plays a different role in your decision making.

Pre-proof indicates that the lender believes the buyer is eligible for a certain amount of loan. This is a good sign, but it does not guarantee that your buyer has cash available now.

On the other hand, the proof of the fund letter shows that the money is in place. If you receive a cash offer for your home, then the front and early POF is more important.

For financing purchases, you may see these two documents: pre-certification of mortgage loans and proof of down payment funds. Together, they show you that the buyer is ready in all respects.

Calculate typical serious amounts

Another way for buyers to prove financially ready is through serious money – a good faith deposit held in custody until closed. The exact amount may vary, but usually falls between 1% and 3% of the purchase price. In a particularly competitive market, buyers may stand out higher.

Use our serious currency calculator below to see what your home might look like.

Seller’s FAQ

Are you asking for a proof of funding awkwardly before?
not at all. It’s a common request, especially when cash is on the table. Serious buyers expect it and will usually be offered soon.

What if the buyer pushes back or refuses?
That should attract attention. Qualified buyers do not hesitate to support their offer. If anyone refuses, rely on your agent’s guidance before moving forward.

Does every home buyer need proof of funds?
not necessarily. Buyers using traditional financing may just need to show that they have enough funds in their account to cover down payments and settlement fees, often with a simple bank statement. Another exception might be buyers using VA loans, which usually does not require a down payment at all. However, for all-cash offers, proof of funding is expected.

Can I ask the buyer to provide the latest proof of funding during the transaction?
Yes. If the process has been delayed, or the initial document has been several months old, it is reasonable to have an update. A new letter ensures that these funds are still available and can be used when closed.

How long does the fund proof letter be valid?
There are no tough rules, but most sellers and agents prefer documents that are no longer than 30 to 60 days. The freshness of this letter, the more confidence you have that money is indeed available.

Key points of the seller

Proof of funds is not only another paperwork, but it is one of the best tools you have to ensure you deal with serious buyers. It confirms that the money is there, helps prevent wasting time and gives you confidence when choosing between offers.

There is no need to feel uncomfortable about this. Most buyers expect the request and a good agent can handle it smoothly on your behalf.

If you want expert guidance on how to ask for and review proof of funding – as well as help assess offers, negotiate terms and turn your sales to the finish line, Homelight’s free agent matching platform can connect you with trusted local agents who understand your market inside and outside.

Need a quick cash quote? For sellers who want to speed faster than all other speeds, Homelight’s simple sales platform connects you to reviewed cash buyers who already have proof of funds.

Title image source: (Jan Walter Luigi/Unsplash)