Should a Cash Buyer Have to Show Proof of Funds With Their Offer?

Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

Should a Cash Buyer Have to Show Proof of Funds With Their Offer?

When you have a listing in an active adult community, for residents aged fifty-five or better, you are bound to see cash offers.  What I continue to be surprised by is that the cash offers are more often than not, unaccompanied by proof of funds.  What the......I mean, come on!  If a buyer with a loan rolled up on a listing and said they were qualified to buy with a 5% conventional loan, ninety-nine percent of listing agents out there would not consider it a legitimate offer unless a pre-approval letter had been received.  And even at that, some pre-approval letters will have strong listing agents, like myself, calling lenders to see exactly how much they know about their buyer.  How long have they been at their current job?  Have income and assets been verified?  

It is our duty as listing agents to protect our sellers, and that means pouring over the details provided, and digging for details not provided.  Yet, in the past couple weeks, I have encountered buyer agents who feel it is perfectly legitimate to send a cash offer with zero proof of funds.  Apparently, it is an invasion of privacy to ask for such things, at least according to one of the agents.  Account numbers can be redacted, for heaven's sake.

Perhaps the real issue is that these buyers do not wish to show their hand.  If they are offering a substantial amount less than list price, but their statements would show the ability to pay full list price, perhaps they think their negotiating position would be lost.  Well, there are two solutions to that issue.  1) Contact your bank and have a letter drawn up to reflect that you have the amount you offered in cash in your accounts or 2) Use the word NO when negotiating if you truly don't want to pay more.

Not including proof of funds with a cash offer leads cautious listing agents to ask questions.  Do you actually have the cash or are you expecting to get a home equity line of credit on another property?  The latter is not cash unless you have already pulled that cash out of the line of credit and it is in the bank.  Home equity lines are credit cards and may not necessarily be there when you need them. In 2008, when property values were falling rapidly, lenders shut down active lines of credit in my area.  I will never forget that.  One minute folks had lines of credit and then BAM, they were gone.  Think that can't happen again?  Or what if you haven't yet been approved for a home equity line of credit?  It isn't always a slam dunk to get one.

When I ask your agent for proof of funds, it isn't to insult you.  It is to protect the best interests of my seller.  And if you were selling a property, you would probably want me in your corner too, or someone like me.  

Bottom line is this, if you are a cash buyer, just saying so doesn't make you one.  You must be prepared to show proof of funds.  And as discussed above, you can do so without showing your entire liquid assets.  Sellers need to be sure they are pulling their properties off the market and going into business with a buyer who can consummate the deal.



Re-Blogged 1 time:

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proof of funds and cash offers
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Howard Steinhardt Certified Residential Specialist, and Jody Steinhardt "Award Winning Real Estate Agents"
Realty Home Advisors - Boca Raton, FL
"The Steinhardt Advantage"


Sep 13, 2018 10:05 PM #41
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Proof of funds is a wide open statement. What is the "proof" standard? In courtrooms, they do not accept copied documents but insist on originals. Why? They can be forged and manipulated. I have seen too many phony CASH bank statements. If someone is wielding cash as a bargaining tool, back it up...

Sep 14, 2018 06:41 AM #42
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

No proof = no acceptance. Nuff said. 

Sep 14, 2018 08:03 AM #43
Nicole Nark
Nicole Nark - Pixel Properties - Little Rock, AR
Real estate agent serving Central Arkansas

I absolutely think so! We have had deals fall through even within the brokerage because the Buyers agent believes their buyer and doesnt verify until its too late. Save yopurself the headache and get proof! 

Sep 14, 2018 08:16 AM #44
Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Oh, this is a good one, Chris Ann and some of the answers either have you laughing or crying. There is no excuse for an agent to be working with a cash buyer and feeling that it's an invasion of privacy if the listing agent asks for proof.


We can expect some buyers to be ignorant (not in an insulting way) of the process, but agents?  Come on.

Sep 14, 2018 08:19 AM #45
Jon Quist
Tucson's BUYERS ONLY Realtor since 1996

That can't be a real question. I am initially more cautious about the "all cash' buyer than I am about a pre-qual letter buyer. Until I see POF, they are not true buyers.

Sep 15, 2018 12:22 AM #46
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

When I have a cash offer, I get the buyer's bank to give me a letter confirming the funds for the exact amount of the cash offer.

Sep 15, 2018 03:19 PM #47
Allyson Hoffman
RE/MAX Villager (Chicago North and North Suburbs Real Estate) - Northbrook, IL
Making Today's Dreams Tomorrow's Reality!

Amen! Agree completely!

Sep 15, 2018 06:25 PM #48
Eva Erdmann
Lion International Inc. - Holiday, FL
interior decorator

If someone wants to sell they'll consider any offer, in the worst case they will not get the cash and they wan't sell, that's it.

Good Luck

Sep 16, 2018 05:52 AM #49
Eva Erdmann
Lion International Inc. - Holiday, FL
interior decorator

that's right, no for someone who needs loan but I would consider offer without proof for all cash, that's what I was talking about but what do I know I'm just a interior decorator.

Have a great day

Sep 17, 2018 06:27 AM #50
Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

I remember once a "buyer" told me she kept her cash at home and the only way she could prove it was to carry the cash with her.

Sep 17, 2018 12:24 PM #51
Eva Erdmann
Lion International Inc. - Holiday, FL
interior decorator

There are all kinds of situations in life as well as in real estate. If someone would carry into your office enough cash to buy property you wanted to sell wouldn't you sell the property ? I would.

Have a Great Day

Oct 10, 2018 09:53 AM #52
Eva Erdmann
Lion International Inc. - Holiday, FL
interior decorator

When I want to buy I go to the one who sells, when I want to sell I go to the one who wants to buy, if I face too many obstacles I go somewhere else, that's me, but everybody is different.

Have a great day

Oct 11, 2018 09:10 AM #53
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

A buyer's agent who is a real professional will have this covered when the offer is presented.... ability to purchase is the most important part of any offer.

Nov 10, 2018 05:59 AM #54
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

Of course they must Chris Ann Cleland  show proof of funds . Anyone could say they have cash .  In some cases in a hot market buyers are saying they are buying cash showing cash but getting a mortgage but that is fine with me as it in not contingent on mortgage financing  so if necessary the are committed to cash . Glad  Carol Williams  gave this a SCS 

Nov 10, 2018 10:28 AM #55
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

No, buyers should not be insulted when you ask for proof. You don't know them and don't know if they're honest. Anyone can say they have six million dollars. Even I could SAY that. It wouldn't make it true.

I remember having buyers who said they'd pay cash, but... had to delay closing for a couple of months because the money was coming from a settlement they expected "any time now." Often those settlements were nothing more than wishful thinking.

Nov 10, 2018 09:15 PM #56
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

Intersting Post!  Got some great discussions going on! 

It is in our contract for dates to supply POF

Most cash buyers know the drill and are ready to produce POF


Nov 11, 2018 12:11 AM #57
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Chris Ann

It's perfectly reasonable to require a POF (recent of course) of some sort, and there are number of ways to demonstrate this. Why should a seller take someone's word thay have hundreds of thousand available to buy the home? I always require it from buyers, and provide it when working with a buyer, and other agents do as well.


Nov 11, 2018 07:14 AM #58
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I always require a proof of funds on any cash offer unless I have experience with that particuloar investor, but the banks that finance the builders still want it.

Nov 11, 2018 01:08 PM #59
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Good points and greuat post!  I agree that someone who does not show a POF and has a significantly higher balance than the price of the home is hiding that fact so as not to pose an issue with contract acceptance.  A POF is required with a contract in Arizona so we have no choice, which I think is a good thing most of the time.

Nov 15, 2018 02:29 PM #60
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Chris Ann Cleland

Associate Broker, Bristow, VA
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