In the world of real estate investing, a cash offer is how many investors choose to make their offers.
But how can an investor show proof of funds for a cash offer without having any sort of bank statement? It’s easy!
Read on to learn more about how a Proof of Funds Letter will help secure a deal easily.
What is a Proof of Funds Letter?
A proof of funds letter is one of the first steps taken by an investor during negotiations with a seller It shows the investor is serious about buying their house and can show that they have the money to do so. It eases the seller’s concerns about how the investor will come up with their portion of the sale price.
A proof of funds letter can be as simple as a quick email or it could include more detail depending on how important it is that the investor shows proof of their cash on hand. The letter should include how much money they have available to invest, how long it has been in their bank account, and how they can use them. It’s an easy way for any seller to see how serious an investor is about purchasing their property.
How Does a Proof of Funds Letter Help Secure a Deal?
A proof of funds letter is a huge part of securing the deal when making an offer on a property. Not only does it show how serious an investor is, but also how financially able they are to purchase a property. Having this information will put a seller at ease, knowing that the seller has the cash to complete the purchase.
What Can an Investor Include in Their Proof of Funds Letter?
Depending on how much detail is needed, an investor can include many different things in their proof of funds letter. Some investors only need to show how they have access to their money and how long it has been there. Others may choose to provide more information, such as exactly where the cash came from (i.e., how they were paid or how much money is in their bank account).
Generally, a proof of funds letter should include how many days it has been held at the current institution and how long the investor has had access. Along with this information, investors may choose to provide more detail, such as where the cash came from or whether the bank has verified it.
Whatever the investor’s choice, they should include how much money they have available and how long it has been there before submitting a cash offer on any property. One can never know when this information may come in handy!
How Can an Investor Get a Proof of Funds Letter?
There are two ways to get a proof of funds letter. The first way is by contacting the bank directly. If an investor chooses this option, they should ensure that the seller knows how long they [the seller] has had access to their account and how much money has been in there for that time (i.e., how many days it’s been held).
The second way to get a proof of funds letter is through an online service. The process is simple; an investor inputs how much money they have available and how long it has been in their account, then creates a proof of funds letter for the investor’s use. Some services will even go as far as verifying how much cash an investor has access to by using the bank’s records, so all that’s left for them to do is submit it to the seller.
Whatever the choice, the investor should ensure they use proof of funds letter when offering on any property.
Challenges Faced by Real Estate Investors Without Proof of Funds?
Some examples of how investors can struggle when submitting a cash offer without proof of funds is not having the ability to negotiate and giving up more than they should. This is because there’s no way for them to show how serious they are about purchasing property, which puts their real estate goals in jeopardy.
There may also be issues regarding how an investor presents how much money they have available. Some banks may not be able to verify how much cash is in their account, which can also make it difficult for a seller to trust how serious an investor is when purchasing property with cash.
Tips for Presenting a Proof of Funds for Cash Offer?
An investor can do a few simple things to make it easier for a seller to trust how serious they are about their offer.
- They should always include how much money has been held in their account and how long it’s been there. This shows the seller how financially able an investor is and how committed they are to making this purchase.
- Another tip is to provide the proof directly from their bank, if possible. If they can show how much money has been held in there for how many days it’s been there, the seller will have a very hard time saying no when they see how serious and committed an investor is about purchasing their property with cash.
- Whether an investor chooses to get a proof of funds letter from an online service or directly from their bank, they should ensure it is detailed enough for the seller. This way, they know how serious and committed the investor is about purchasing their property with cash!
Benefits of a Proof of Funds Letter When Submitting a Cash Offer
Having a proof of funds letter when submitting a cash offer on property is beneficial for many reasons.
- It shows how serious and committed an investor is to purchase their property with cash. This way, the seller knows how much the investor wants this deal!
- It also makes it easier for them to trust the investor’s ability, which can result in making a deal happen.
- Having a proof of funds letter also makes it easier to negotiate because investors can show how serious and committed they are by including how much money has been held in their account for how many days, which will help the seller understand how dedicated the investors really are!
Get Your Proof of Funds Letter Today
Maybe you’ve wondered, how do I show proof of funds? A proof of funds letter is a fantastic way to show your financial stability when submitting an offer on a property.
And now, you can get a proof of funds letter instantly!
Click the link below to purchase and you will be instantly verified to impress the seller and secure your newest property. What are you waiting for?
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