How to Show Proof of Funds to Buy a House With Cash

When purchasing a home with cash, “Proof of Funds” (POF) confirms a buyer’s financial capacity to complete the transaction without external financing. POF assures the seller that the buyer has readily available funds to cover the entire purchase price and associated closing costs.

Presenting proof of funds signals a serious offer, allowing the transaction to proceed efficiently and minimizing financing delays. This provides confidence that the buyer is financially qualified and prepared to close. This assurance is particularly advantageous in competitive real estate markets, helping a cash offer stand out.

Qualifying Sources for Proof of Funds

Proof of funds documentation originates from financial institutions and must demonstrate liquid assets. Common sources include checking, savings, and money market accounts. For these, proof should display the account holder’s name, institution’s name and address, account number (often partially redacted for security), current balance, and statement date. Funds must be liquid, meaning easily accessible and convertible to cash.

Brokerage accounts, holding assets like stocks, bonds, or mutual funds, can also serve as proof of funds if readily liquidated. Consolidating funds into one account or providing statements for all accounts simplifies verification. Statements should be recent, ideally dated within the last 30 to 60 days, to confirm availability.

Other acceptable sources include certificates of deposit (CDs) if near maturity or accessible without significant penalty. Retirement accounts (e.g., 401(k)s, IRAs) are generally not liquid proof of funds, as withdrawals typically incur penalties or taxes and require liquidation. If using funds from these accounts, they must be withdrawn and deposited into a liquid account beforehand. A formal letter from a bank or financial institution, on official letterhead, stating available funds and signed by an authorized employee, is often preferred or required by sellers.

To obtain these documents, buyers can download recent statements from online banking portals or request official bank letters from their financial institution. Banks often provide a proof of funds letter within one to two business days; allow a few extra days. For investment accounts, contact a financial advisor or brokerage firm for statements.

Presenting Your Proof of Funds

POF is commonly requested either concurrently with a cash offer or shortly after acceptance. Providing it upfront can make an offer more attractive and demonstrate a buyer’s serious intent.

Proof of funds is typically provided to the seller’s real estate agent, who conveys it to the seller. In some cases, it may be submitted directly to an escrow or title company. Secure transmission methods are important due to the sensitive nature of financial information. Options include secure online portals from real estate professionals or encrypted email to protect personal data.

When submitting financial statements, redact sensitive information like full account numbers and Social Security numbers. This protects privacy while allowing the seller to verify essential details: account holder’s name, financial institution, statement date, and available balance. Visible information must clearly demonstrate funds are sufficient for the purchase price and anticipated closing costs.

The seller or their agent may verify information with the financial institution for legitimacy and accuracy. Maintaining current documentation is important; updated proof of funds may be requested if the transaction extends, especially if initial documents are older than 30 to 90 days.