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Reason for a Seller/Buyer Give a Proof of Fund (POF)

The listing agents who advice the seller not to remove the home from the market until the buyer give a proof of fund (POF).

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Reason for a Seller/Buyer Give a Proof of Fund (POF)

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  1. Proof of Fund (POF) and the Reason for a Seller to Demand It?

  2. When a home buyer obtain a mortgage sellers often demand for a proof of funds. Actually a seller just want to see a proof that if buyer has a down payment or closing costs or both before deciding to sell the house to that buyer. A preapproved letter or just the word of the buyer is not enough of proof for a mortgage to receive. Sellers also demands proof of fund from a cash buyer because of the listing agents who advice the seller not to remove the home from the market until the buyer give a proof of fund to them.

  3. Now as to what is a ‘proof of fund’ (POF)? Most of us already guessed that since the seller don’t trust the buyer in case of money, so they demand evidence that show that they have the amount to purchase a particular house. Most of buyers considered themselves as cash buyers who have required cash in their hand where no involvement of any home loan or mortgage is. But the truth is most of them are not cash buyers at all. The buyers who are in the middle of selling stocks or mutual funds or without a matured deposit certificated or borrowing money from a relative or other sources without any securities or to increase the cash refinancing a personal residence is not considered cash buyers. So in other words it the cash is not liquid and readily available in the purchase then the buyer is not considered as a cash buyer.

  4. If a buyer demands themselves as cash buyers by obtaining hard money loan which is certainly not a cash buyer, they violate the agreement law and their behaviour is considered as deceptive at minimum. There are some other payment involve in beyond the earnest money deposit for the purchase contract which are to close the escrow you will need to pay the closing cost along with your down payment. In most of the cases as a closing cost a buyer need to pay 3 percent of the original sales price.

  5. In some cases buyers are argue with the seller that they don’t need a proof of fund as they have a very high statue in the society. But even a millionaire buyer is asked to show their proof of fund. Some might think it as an insult but it is just a business. The proof of fund is an evidence for a buyer to show the seller and the seller agent that they have the capability to buy that house.

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