Process

Proof of Funds (POF)

Documentation showing a buyer has the cash or financing to close on a property.

Definition

Proof of funds is a document — typically a bank statement or a letter from a lender — that demonstrates a buyer has the liquid capital to close on a real estate purchase. Wholesalers require POF before taking an offer seriously. A POF can be a recent bank statement showing a balance equal to or greater than the offer amount, a hard money lender's approval letter, or a commitment letter from a private lender.

Related terms

Earnest Money Deposit (EMD)

A refundable or non-refundable deposit a buyer provides to show commitment to a purchase.

Hard Money Loan

Short-term real estate financing from a private lender, based on the value of the asset ra…

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