Why do we ask for proof-of-funds when you are coming to buy a property here in Florida?
In the last few years the market has really changed - especially for financing and buying properties. Recently many sellers were lenders who owned the properties (REOs). All REO sellers required proof-of-funds (that are less than 30 days old) with all offers.
Now, most sellers require proof-of-funds with any offer - even regular home and condo owners. Here is an actual case. We had the buyer who made an offer accompanied by proof-of-funds. The condo-owner received two offers. Our offer had proof-of-funds, but the other buyer's offer was higher. The sellers responded saying they would accept the higher offer if the buyers could come up with proof-of-funds within 24 hours. The buyers couldn't produce the proof-of-funds, so our buyer's offer was accepted.
The proof-of-funds depends upon how are you going to pay - cash or financing. If you plan to pay cash, the proof-of-funds could be a letter from your bank, stock brokerage or retirement fund stating that you have the capital to purchase a property for the $$$ range you are looking in.
If you plan to get a loan, your proof-of-funds would be a pre-approval from the bank that will make the loan. Choosing the right bank for the loan is important. Many prospective buyers say "Oh, I can get a loan from my bank here." Let's say you live in Ohio. Well that is fine for purchasing Ohio property, but many banks located outside of Florida won't lend on Florida properties. Even if national banks make loans on Florida properties, the financing process goes a lot smoother if the actual loan officer of the national bank is local. So it's best to get your pre-approval from a bank here locally where you plan to buy in Florida. We deal with two local banks who can do a pre-approval over the phone pretty quickly.
It's best to have proof-of-funds with you when you arrive here in Florida to look at homes. Proof-of-funds should be less than 30 days old.
We hope this is helpful when we ask you about proof-of-funds.
Bob & Jen