You are scrolling through Facebook one afternoon when you see this new listing shared from a local Realtor® page you follow. This is it! The one you've been waiting for. The property has everything you've wanted in a home and you rush to the phone to call the Agent so you can schedule a time to go check it out in person.
The agent says: Do you have a pre-approval or proof of funds? I'd love to show you this home, but first..... we need preapproval or proof of funds.
We do NOT like turning away prospective buyers, however our experience has shown us that without a preapproval (for financing) or proof of funds (for cash offers) prior to showing homes, the buyer is setting themselves up for a lot of wasted time, frustration, and also heartbreak. Additionally, if the property is bank-owned (REO, Foreclosures, etc) the seller may require pre approvals and/or proof of funds prior to all showings.
For more information on pre-approvals, check out our blog post.
But what does proof of funds mean exactly?
Proof of funds typically is a bank statement (or even a screenshot of account balance, or letter of funds availability from your financial institution. If you are wanting to shop for homes, it's important to be able to show the seller that you have the funds available to back up your offer. This is especially important right now, when buyers are in heavy competition against each other for new listings.