Proof of funds: what a real cash buyer should show you

Proof of funds is a recent document showing that the buyer already holds the money to close. It is the difference between a cash offer and a promise.

We found no statute in the states we checked that defines proof of funds. It is something you ask for in the contract, and what counts as good proof comes from closing practice rather than law. That is why it pays to know what to look for.

Some buyers send a letter from a hard-money or private lender and call it proof of funds. It is proof of a loan.

Texas’s standard resale contract says the cash portion of a price “does not include proceeds from borrowing of any kind” and lists financing separately.¹ Other states’ forms differ, but the logic holds everywhere: a loan can be declined after appraisal or underwriting, and your closing goes with it.

These are practice rules, not legal requirements, but they catch most problems.

• A different name on the funds than on the contract.
• An old date, more than about 30 days back.
• A screenshot of a banking app, or a letter with no letterhead, no officer and no phone number.
• A “fund manager” or “investor network” letter instead of the buyer’s own account.
• Refusing to deposit earnest money with a named title company, escrow office or closing attorney.
• Payment or wire instructions sent by email, especially to an account in a different name.

The FBI lists a wire to “an account under a different name” and pressure to close quickly among the warning signs in real estate deals. It wrote that about fake sellers, but the same pattern applies to fake buyers.²

1. Look up the bank yourself

   Find the bank through the FDIC’s BankFind tool, or a brokerage through FINRA BrokerCheck, and use the phone number on the institution’s own site, never the number on the letter.

2. Ask the buyer to authorize confirmation

   A bank may decline to discuss an account without the holder’s consent, so ask the buyer to let the bank confirm the balance to you or to the title company.

3. Have the title company confirm the deposit

   Ask the title company, escrow office or closing attorney named in the contract to confirm when the earnest money arrives and, before closing, that the buyer’s funds are in.

The consumer bureau’s advice on closing money, written for buyers, protects sellers too: never follow payment instructions in an email, and confirm by phone using a number you already had.³

In Texas’s standard contract, the buyer must deliver earnest money to the escrow agent within 3 days of the effective date, and the seller may terminate if it does not arrive.¹

Proof of funds tells you about the money. These five checks tell you about the buyer.

Use the buyer’s BBB file as a pointer, not a verdict. Our state guides point to the search tools for each state we cover.

Not right now. A federal court vacated FinCEN’s residential real estate reporting rule on March 19, 2026. FinCEN and the Department of Justice have appealed, and while the order stands, closing agents do not have to file the reports.⁴

If the rule comes back, it covers non-financed sales to LLCs, other entities and trusts, including many purchases funded by private or hard-money lenders, with no price threshold and a few exceptions. The closing or settlement agent, not the seller, files the report, and may ask you for your legal name, date of birth, address and an ID number.⁵ That request would be the closing agent’s filing, not a sign of a problem with the buyer.

Call your bank immediately and ask it to recall the transfer, then file a complaint at ic3.gov, whatever the amount. In 2025, the FBI’s Recovery Asset Team froze $679 million across 3,900 incidents.⁶

In 2025 the FBI’s Internet Crime Complaint Center logged 12,368 real estate fraud complaints, a category covering investment, rental and timeshare fraud.⁶

Business email compromise, the scheme commonly used to divert closing wires, accounted for $3.05 billion of reported losses in 2025.⁶