Transactional Funding Proof of Funds: What Title Companies and Sellers Want to See

Mixing these up is one of the most common ways a double close stalls. Here is what each proof is for, who asks for it and what it should show.

Why does a double close need two proofs of funds?

A double close is two separate sales. In the A-B closing, the seller (A) sells to you (B). In the B-C closing, you sell to your end buyer (C). Each side has its own question:

• The seller and their agent ask: can B actually buy?
• Your transactional lender asks: can C actually pay, so the loan gets repaid?

Proof of funds (POF) is a document showing money is available. You need one going up the chain and one coming from your buyer.

What does a seller or listing agent want to see?

They want confidence your offer will close. On MLS and REO listings especially, agents often ask for proof of funds with the offer. Because transactional funding pays for your A-B purchase, a letter from your transactional lender can serve as that proof.

At Axelrad, you request a letter for the specific property. A person on our team reviews every request before a letter is issued, and letters come back the same day, often within minutes to hours. Include:

1. The property address and the amount you are offering.
2. Who the letter should be addressed to: the listing agent, the seller or the title company.
3. Your deadline, so we know when you need it.

Will a lender issue a proof-of-funds letter for any deal?

A responsible one will not. Axelrad only issues a proof-of-funds letter for a deal we are actually involved in, as your transactional funder or lender. We do not issue letters for deals we are not part of just to help lock one up with a seller. If a lender hands out generic letters with no review, ask what the letter actually commits to.

What proof do you need from your end buyer?

This is the proof your transactional loan is underwritten on, so it gets checked first.

• Cash buyer: their proof of funds, such as a recent bank or brokerage statement or a letter from their lender showing available money.
• Financed buyer: the name of their lender and whatever conditions are still open on their loan.

A financed buyer is not a problem in itself. Cash and financed end buyers both work on Axelrad's transactional program. But open conditions are where closings slip, so ask your buyer early. Some loan types also restrict quick resales. Federal rules generally make a property ineligible for FHA-insured financing if it is resold within 90 days of the seller's acquisition (24 CFR 203.37a), which usually rules out an FHA-financed end buyer on a same-day double close.

Is a preapproval the same as proof of funds?

No. A preapproval shows a lender is willing to lend if conditions are met. It is not money in hand. Our post on proof of funds vs. preapproval explains what each confirms and what to verify before a double close.

What does the title company want?

Title is running two files and has to close both in order. Before the A-B leg funds, expect them to ask for both executed contracts with amendments, how the end buyer is paying, the transactional lender's wire and payoff figure, and the order of events. A title company that handles back-to-back closings will also run separate title work on each leg. Requirements vary by title company and state.

A simple POF sequence for a double close

1. Get your A-B contract signed. Request a property-specific POF letter if the seller or agent needs one.
2. Get your B-C contract signed.
3. Collect your end buyer's proof of funds, or their lender's details and open conditions.
4. Send both contracts and the buyer's proof to your transactional lender.
5. The lender confirms title is ready for both legs, then wires the A-B purchase money.

Key takeaways

• A double close needs two proofs: one that you can buy, and one that your end buyer can pay.
• A transactional lender can supply a property-specific POF letter for your offer if it is actually funding the deal. Axelrad's come back the same day, often within minutes to hours.
• Your end buyer's proof is what the transactional loan is underwritten on, so it is checked before any money moves.
• A preapproval is not proof of funds. Know which conditions are still open.
• Some financing types, such as FHA, restrict quick resales. Confirm how your buyer is paying.

Talk to Axelrad

Need a proof-of-funds letter for a deal we are funding? Start with Axelrad's proof-of-funds request, or send your contracts through the application. The transactional funding page has current terms.