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Q: I represent a seller who accepted a cash offer for his home. We have requested proof of funds from the buyer and in turn received a letter from the buyer’s financial advisor stating that based on his conversations with the buyer he believes the buyer holds sufficient assets to purchase the home. My client is uneasy about proceeding. Does the letter satisfy the proof of funds requirement?
A: Based on the information provided, no, this does not satisfy the proof of funds requirement in the purchase contract. The proof of funds provision in the purchase contract states that the buyer must provide verification “…from a third party in possession of Purchaser’s assets.” The key here is that the third party be in possession of the buyer’s assets such that they can independently verify the funds owned by the buyer. A banker, for example, could verify the amount of funds in a prospective buyer’s checking or savings account. In this situation, the financial advisor has relied on the attestation of the buyer, implying that the financial advisor is not in possession of the assets himself.
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