Yes!
As a listing agent, I didn't always ask to see evidence of funds needed to close. But then a buyer made an offer on our listing and the deal went awry in the days before closing. Their agent said they were rock solid, putting almost half down on the purchase in cash. In this case, it was kind of a clumsy side-stepping of our form 22Q, which is all about contingency on the closing of another real estate contract already in process. The buyer had "sold" their house in California and were expecting a large chunk of proceeds from their equity. That deal did close, but it turned out they miscalculated their existing liens agains the property and their down payment was short - quite a bit short; to the point that it affected their mortgage approval here. The buyer did not understand that they had a contingency! In many situations, buyer's don't want to have contingencies. They want a strong offer that will win, so they try to cut the number of "ifs" down to a minimum. But a seller deserves to know!
It is important that non-contingent funds are in the buyer's account when the offer is made. I always wanted to see the money for cash offers, but lately we've started requiring it for financed offers too, specifically for the down payment. Here's why.
Are Gift Funds and Bonuses Okay?
Some buyers assume their down payment is okay because it's coming — from a bonus, from selling another house, from a gift that hasn't landed yet. That is all weak. A seller evaluating your offer deserves to know if part of your down payment is weak... that it, say, depends on someone else writing a check.
What I'll actually accept.
A screenshot of an online banking app works, showing the balance and the buyer's name — account numbers blacked out. A letter from the buyer's lender confirming they have verified down payment funds also works. The lender is already combing through the buyer's financial situation, so their letter carries weight. Is it foolproof? No — a buyer could technically spend that money the moment after showing it to me. But that may not be the point.
Importantly, asking for proof-of-funds forces a conversation early in the process about whether the money is actually there. It helps many buyers understand the distinction of cash on hand vs. a promise of future cash on hand. Having a buyer show the money is also a representation. I'm not a lawyer, but if someone shows proof of funds but later says they can't get financing because of a lack of funds, you can bet we are going to waive that proof of funds they showed.
More funds isn't always better, but sometimes it is.
People wonder if showing more than enough funds is wise in a negotiation. It depends. In a multiple offer situation, showing you're not stretched thin can work in your favor — sellers want confidence that you'll perform, not just that you can technically qualify. Yes, a seller could use that information to counter you. But I'd rather have them counter me than another buyer who showed strong qualifications. If you're worried about tipping your hand, an escalation addendum with a clause requiring the seller to show you the competing offer before the escalation kicks in can be a reasonable safeguard.
Should Sellers Require Evidence of Funds for Showings?
No, not in my opinion. Requesting proof of funds before someone even walks through the door is a barrier. It discourages legitimate buyers and doesn't buy you much. Personally, I've never done it and wouldn't recommend it.
Brokerage Accounts as Proof of Funds
Stocks and other equities are a fine source of down payment funds. But selling stocks takes time, and it can trigger capital gains, so that's a conversation I have directly with the buyer's agent about timing. It's not really a red flag, just something both sides should understand going in.
The Takeaway: Communication
Most of what separates a smooth transaction from a stressful one isn't paperwork — it's communication. Too many agents default to texting everything back and forth instead of picking up the phone and talking to the other side. You learn more in a five-minute conversation with the other agent than in a dozen text exchanges, and evidence of funds is a perfect example: it's not all about the screenshot. It's about the conversation it starts.
By Tom Hume
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