Proof of Funds and Cash Offers on a Luxury Home

Before a seller of mine signs a cash offer, I ask to see proof of funds: a recent statement or letter from the buyer's bank or brokerage showing the money to close is there. On a financed offer, the matching document is a lender's preapproval letter, and on either one, the money is only as safe as the wire that moves it.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. On a luxury home in Monmouth or Ocean County, the deposit and the closing wire are large numbers, and the paperwork behind them deserves the same care as the price. Here's what I ask for, what New Jersey's contract rules say, and what the FBI and the CFPB tell buyers and sellers to do about wire fraud.

What proof of funds do I ask for on a cash offer?

When I represent the seller, I ask for it with the offer, before anyone signs. I'm looking for:

• A recent statement, or a letter from the institution, showing available funds in the buyer's name, or in the name of the LLC or trust that's buying.
• Enough to close, meaning the price plus the buyer's closing costs.
• Account numbers blacked out. Nobody on the seller's side needs them.
• A secure way to send it. The CFPB says "Email is never a secure way to send financial information," so a secure upload beats an attachment (CFPB).

When a listing draws several offers, the way one of mine drew 6 offers over asking and an accepted offer in the first 7 days, these documents are how a seller compares them on more than price.

What's the difference between a preapproval and a prequalification?

Less than the names suggest. The CFPB says both letters state how much a lender is willing to lend, up to a certain amount and based on certain assumptions, and that they "are not guaranteed loan offers." Some lenders issue a prequalification on unverified information and a preapproval only on verified information, but the CFPB's advice is not to worry about which word a lender uses, because lenders' processes vary widely (CFPB).

So I read the letter, not the label: who issued it, the amount, and what the lender says it checked. At luxury prices, the buyer's loan may be a jumbo loan, which brings its own questions. See what a jumbo loan is in Monmouth and Ocean County.

What does a cash offer mean in a New Jersey contract?

It means the buyer isn't relying on a mortgage to close. The contract rules don't change. Under N.J.A.C. 11:5-6.2, contracts that real estate licensees prepare for one-to-four-unit homes carry the attorney review clause: the contract becomes legally binding at the end of three business days unless an attorney for the buyer or the seller reviews and disapproves it. You count from delivery of the signed contract, you don't count Saturdays, Sundays or legal holidays, and both sides can agree in writing to extend it (N.J.A.C. 11:5-6.2).

What a cash contract says about inspections, an appraisal, the deposit or the closing date is between the buyer, the seller and their attorneys. On my listings, every offer gets measured against the plan, not only the price: terms, timing and contingencies.

How do you protect the wire on a luxury closing?

Treat every email about money as unverified. The FBI's Internet Crime Complaint Center says business email compromise targets everyone in a real estate deal: buyers, sellers, real estate attorneys, title companies and agents. Once a criminal gets into one person's email, they can follow the transaction and time a fake request to switch a payment from a check to a wire, or to a different bank account. The FBI reported a 27% increase in these real estate complaints from 2020 to 2022, and a 72% increase in losses (FBI IC3, June 2023).

The CFPB's steps (CFPB):

1. Pick two trusted people, such as your agent and the settlement agent, and talk through the closing and the money transfer in person or by phone. The CFPB suggests agreeing on a code phrase.
2. Write down their names and phone numbers ahead of closing.
3. Confirm before you wire. "Never follow instructions contained in an email." Verify the account name and number in person or "by using the phone number you previously agreed to."
4. Skip the links and phone numbers in the email. Scammers can copy an agent's email address, phone number and format.
5. Don't email financial information.

The FBI adds two more: use secondary channels or two-factor authentication to verify any request to change account information, and check that the sender's email address matches who it claims to be from (FBI IC3). Its 2018 warning noted that some victims couldn't tell a fraudulent phone call from a real one, which is why it suggests code phrases known only to the real parties (FBI IC3, July 2018).

Sellers, this applies to you too. If your proceeds will be wired, confirm those instructions the same way. An email that says the wiring instructions changed is fake until you've confirmed it by phone, at a number you already had.

Does a cash purchase by an LLC or trust get reported to the federal government?

Not right now. FinCEN's Residential Real Estate Rule would require reports on non-financed transfers of residential property to entities and trusts, with exceptions. On March 19, 2026, a federal court in the Eastern District of Texas vacated the rule. FinCEN, with the Department of Justice, has appealed, and it says reports aren't required while the order remains in force (FinCEN). I cover the rule, and what an LLC or trust does and doesn't keep private, in buying a home in an LLC or trust for privacy.

Selling? Start with what your home should bring: get a free home value. Buying? See how I work on the buying page. Either way, the Luxury & Waterfront Guide covers the full process, and you can see how I handle luxury homes.

Frequently Asked Questions

Is a preapproval letter a guarantee?

No. The CFPB says prequalification and preapproval letters are not guaranteed loan offers. Read what the lender says it verified.

Can a buyer back out of a cash offer in New Jersey?

During attorney review, an attorney for either side can disapprove the contract within three business days. After that, the contract's own terms control, and that's a question for your attorney.

Should I email my bank statement as proof of funds?

The CFPB says email is never a secure way to send financial information. Black out account numbers and use a secure upload.

What do I do if I wired money to a scammer?

Contact your bank or wire-transfer company immediately and ask for a wire recall, then file a complaint with the FBI at ic3.gov. The FBI says to file regardless of the amount lost.

This is general information, not legal, tax or lending advice. Talk with your attorney about your contract and with your lender about your loan.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. Read more about Dennis Mark.

Keep reading

• Should you use cash or a home loan to buy in New Jersey?
• Buying a home in an LLC or trust for privacy
• What is a jumbo loan in Monmouth and Ocean County?
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.