Why You Must Have Proof Of Funds To Make House Offers
Having a Proof Of Funds letter is one of the first steps to making house offers and kickstarting your real estate investing.
What Is A POF?
A Proof Of Funds Letter or POF, is a letter or financial statement showing how much money you have available.
In real estate, this is used to show property sellers and agents how much cash you have. This shows proof that you can afford to pay for the property and back up your house offers or letters of intent.
This may be evidence you can pay all cash, or in tandem with a mortgage pre-approval letter from a lender.
When Do You Need A POF?
Most Realtors will not even show you a property without having a POF in advance. They guard their time, and will often not even entertain your inquiries unless you can produce one upfront.
So, without it, you won’t be able to see inside properties or make offers on any MLS listings or pocket listings agents may have.
Savvy sellers, including other real estate investors will also expect the same. They are often bombarded with inquiries and offers from unqualified buyers, including wannabe investors. Often these sellers know the game even better than agents.
Then you have institutional sellers, like banks, lenders, and private equity funds. Their requirements for making offers can be even more rigorous. Going beyond a POF, to also including seeing your resumes, financials, and track record of how you’ve handled pools of assets you’ve previously acquired.
Picking The Right Buyer
For these sellers and their representatives, it’s not just about the money. They know that picking and going into contract with the right buyer is even more important than the price being offered.
Nothing is more aggravating than having a deal fall apart right before it was supposed to close. A Proof Of Funds letter not only shows that you are financially capable of completing the transaction, but that you are organized, prepared, understand the transaction process, and are ready to move swiftly.
Get in touch with us today for help with your Loan Pre-approval and Proof Of Funds needs today!
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