POF stands for PROOF OF FUNDS.
Providing Proof of Funds is essential in a real estate transaction, especially for foreclosures and short sales where this will be demand up front with your offer.
POF demonstrates to the seller that you DO have the necessary funds to purchase the property. This is particularly important if you are a CASH BUYER.
While our California contract allows for a period of time after acceptance to provide POF, I always advise doing so up front – it makes your offer more competitive in the case of a loan, especially if you are in a competitive bid situation and you are putting down substantial cash as part of your offer.
And if you are a CASH BUYER, I ALWAYS advise providing a POF up front, even with normal sales.
So what constitutes a POF?
If could be a copy of your most recent bank statement(s) or a letter from your banker stating that you have the necessary funds to purchase the property in question. A POF should always be recent – one that is 6 months old won’t cut it, and in the case of foreclosures and short sales it MUST be 30 days old or less. The more recent the better, in all cases.