Proof of funds: what counts, what does not

What the request is really asking

Nobody asking for proof of funds cares about your net worth. They are asking one question: if this contract is assigned to you today, will the money be at the title company on the closing date. Everything that answers that question counts, and everything that does not, does not.

What counts

A bank statement showing liquid funds, dated inside the last thirty days, with the account holder matching the entity that will sign. A letter from your bank on their letterhead saying the same thing. A hard money lender's approval letter naming a specific amount, if you are using one. A line of credit statement showing available balance. Any of those, on their own, is enough.

What does not

A generic proof of funds letter from a company that will sell you one for $40 - every disposition desk has seen them and they mean nothing. A screenshot with the balance visible and the account holder cropped out. A statement six months old. A letter from a lender who has not underwritten you and is only saying you would probably qualify. Equity in other property that would have to be refinanced first, unless you say so and give a timeline.

Redact the right things

Black out the account number and the transaction history. Leave the account holder name, the institution, the date and the balance. People redact so aggressively that the document stops proving anything, and then wonder why they are asked for another one.

Send it before you are asked

The buyers who close are the ones whose file is already complete when the deal lands. If your proof of funds is on record and current, you can be given a deal at eight in the morning and be under contract by ten. If it is not, you are in a queue behind someone whose is.

Entity names have to match

If the statement shows your personal name and the contract will be signed by your LLC, say so up front and be ready to show the connection. A good half of the delays at this stage are not about money at all. They are about a name on one document not matching a name on another, discovered on the day it mattered, with a closing date already agreed.

Partner and lender funding

Plenty of buyers close on somebody else's money and there is nothing wrong with it. What causes problems is presenting it as your own. If a partner is funding, a short letter from them naming the amount and the deal is worth more than a statement they are not on. If a hard money lender is funding, their approval letter is the document, not your bank balance. Either way, say which it is at the start rather than when somebody notices.

Keep it fresh

A proof of funds ages badly. Thirty days is the usual limit before somebody asks for a newer one, and if you are actively buying you should refresh it monthly rather than waiting to be asked. It takes two minutes and it is the difference between being sent a deal and being sent a question.