Why Sellers Should Ask for Proof of Funds
When selling land to a wholesaler, one of the most important questions a property owner should ask is, “Can you provide proof of funds?” Many wholesalers operate without their own capital, instead relying on outside investors or end buyers to fund the transaction. While this practice is common in real estate wholesaling, it can lead to delays, uncertainty, or even a failed sale if the wholesaler is unable to secure financing in time.
What Is Proof of Funds, and Why Does It Matter?
A proof of funds (POF) document is a statement—typically from a bank or financial institution—confirming that the buyer has the necessary funds available to complete the purchase. Sellers should request this verification before signing a contract to ensure that the wholesaler actually has access to the money needed to close the deal.
Failing to verify proof of funds can lead to:
- Failed transactions – If a wholesaler cannot secure financing, the deal may fall through, leaving the seller back at square one.
- Delayed closings – A wholesaler might tie up the property under contract while they search for an investor, preventing the seller from considering other offers.
- Reduced bargaining power – Without financial backing, the wholesaler may try to renegotiate the deal at the last minute.
How to Verify a Wholesaler’s Proof of Funds
To protect themselves, sellers should ask wholesalers to provide official documentation showing they have the funds available. This may include:
- A bank statement showing liquid cash reserves.
- A letter from a financial institution verifying an active account balance.
- A hard money lender’s approval letter, if the buyer is using short-term financing.
- A funding commitment from an investor, if applicable.
Sellers should also ensure that the name on the proof of funds document matches the name of the buyer listed on the contract. If a wholesaler is reluctant or refuses to provide this documentation, it could be a red flag that they lack the necessary capital to complete the purchase.
Final Thoughts: Why Liberty Land Traders Is a More Reliable Choice
At Liberty Land Traders, we eliminate the uncertainty that comes with dealing with wholesalers who may not have the financial backing to close on a deal. We provide direct cash offers, meaning we have the capital ready to purchase your land immediately—without needing outside investors or additional financing. We buy land quickly, pay in cash, and handle the paperwork, ensuring a smooth, hassle-free transaction.
If you’re considering selling your land and want a guaranteed sale without delays, contact Liberty Land Traders today for a fair, transparent offer backed by real financial security.