Definition
Proof of Funds
Also called: POF letter
Proof of funds is documentation — a bank statement or bank letter — showing a cash buyer actually has the money to close. Any legitimate cash buyer can produce it, and sellers should require it before signing a contract.
A cash sale's main advantage is certainty, and proof of funds is how that certainty gets verified. A recent statement or a letter from the buyer's bank naming an amount sufficient for the purchase is standard; a verbal assurance, a screenshot, or a 'lender pre-approval' (which means it's not actually a cash purchase) is not.
Pair it with a real earnest money deposit held by the title company or an attorney — not by the buyer — and the two together filter out most non-serious offers before they cost you weeks.
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