Proof of Funds: What to Ask a Buyer For

Around one in three agreed property sales in England and Wales falls through before completion. While there are many reasons for this, a significant proportion of collapses can be traced back to buyer financing problems that could have been identified earlier. Asking for proof of funds before you accept an offer is the single most effective way to reduce this risk.

Despite this, many sellers feel awkward about requesting financial evidence from a buyer, or are unsure exactly what documents they should be looking for. This guide sets out precisely what proof of funds to ask for, depending on whether your buyer is paying cash or buying with a mortgage, and how to handle the request professionally and diplomatically.

Why proof of funds matters

Proof of funds serves two purposes. First, it confirms that the buyer actually has the money — or the lending capacity — to purchase your property. Second, it forms part of the anti-money laundering (AML) checks that are legally required in every UK property transaction. You can learn more about AML check costs in our dedicated guide.

From your perspective as a seller, the financial consequences of accepting a buyer who cannot complete are substantial:

• Lost time. The average conveyancing process takes 12 to 16 weeks. If your buyer's financing collapses at week 10, you have lost months of marketing time and may need to start again.
• Missed buyers. While your property is under offer with a buyer who cannot complete, other genuine buyers have moved on to other properties.
• Chain disruption. If you are buying another property at the same time, your buyer's failure can collapse your onward purchase and the entire chain above you.
• Wasted costs. You will have incurred solicitor fees, search costs, and other expenses that are not recoverable if the sale falls through.

Asking for proof of funds is not rude, suspicious, or unusual. It is standard practice in every UK property sale, and any serious buyer will expect the request. For more on evaluating buyer quality, see our guide on how to choose the right buyer.

What to ask a cash buyer for

A cash buyer is someone who is purchasing the property without a mortgage. They are paying the full purchase price from their own funds. Cash buyers are often favoured by sellers because they eliminate the risk of a mortgage decline and can typically complete more quickly. However, you should verify their cash position just as rigorously as a mortgage buyer's — perhaps more so, because there is no lender performing its own checks in the background. For a detailed comparison, see our guide on cash buyers versus mortgage buyers.

Documents to request from a cash buyer

It is reasonable to ask for at least two of the above — typically bank statements plus a solicitor's or accountant's confirmation letter. Bank statements alone can be forged; a professional letter provides independent verification.

Cash buyers funded by a property sale

Some buyers describe themselves as cash buyers because they intend to use the proceeds from selling their own property. This is not a true cash purchase — it is a chain transaction. If the buyer's funds depend on completing their own sale, you should ask for:

• Evidence that their property is on the market or under offer
• A memorandum of sale from their estate agent, if already under offer
• Confirmation of their expected net proceeds after mortgage redemption and costs

A buyer whose cash position depends entirely on their own sale completing carries significantly more risk than a buyer with funds already in the bank.

What to ask a mortgage buyer for

The majority of residential buyers in England and Wales use a mortgage. For a mortgage buyer, proof of funds has two components: the mortgage lending and the deposit.

The agreement in principle (AIP)

An agreement in principle — also known as a mortgage in principle (MIP) or decision in principle (DIP) — is a conditional statement from a lender confirming that, based on a preliminary assessment of the buyer's financial situation, the lender would be willing to offer a mortgage up to a specified amount. The AIP is the standard document used to evidence a mortgage buyer's borrowing capacity at the offer stage.

When reviewing an AIP, check the following:

• The amount. The AIP amount plus the buyer's deposit should cover your asking price (or the agreed offer amount). If the AIP is for £250,000 and the buyer is offering £320,000, they need to show a deposit of at least £70,000.
• The date. AIPs are typically valid for 60 to 90 days. If the AIP is nearing its expiry date, the buyer may need to renew it before the full mortgage application is completed.
• The lender. An AIP from a mainstream high-street lender (such as Barclays, Nationwide, Halifax, or NatWest) is generally more reliable than one from a specialist or sub-prime lender, though there may be legitimate reasons a buyer uses a specialist lender.
• The buyer's name. Make sure the AIP is in the name of the person (or people) making the offer on your property.

AIP versus full mortgage offer

It is important to understand the distinction between an AIP and a full mortgage offer, because they represent very different levels of commitment from the lender:

At the point you accept an offer, you should expect to see the AIP, not the full mortgage offer. The full offer comes later in the conveyancing process, typically four to eight weeks after the buyer submits their full application. If you are comparing multiple offers, having an AIP is a minimum requirement — see our guide on how to handle multiple offers.

Evidence of the deposit

The AIP only covers the lending component. You also need to see evidence that the buyer has their deposit. The deposit is the difference between the purchase price and the mortgage amount.

Ask the buyer for:

• A recent bank statement or savings account statement showing the deposit amount is available
• If the deposit is coming from a Help to Buy ISA, Lifetime ISA, or similar scheme, a recent statement showing the balance
• If the deposit is a gift, a gifted deposit letter (see below)
• If the deposit is coming from the sale of another property, evidence of the sale progression

Gifted deposits: what to look for

A gifted deposit is money given to the buyer by a third party — almost always a parent or close family member — to use as part or all of their deposit. Gifted deposits are increasingly common among first-time buyers, and they are perfectly legitimate. However, they require additional documentation because the mortgage lender needs to be satisfied that the money is genuinely a gift and not a loan.

The gifted deposit letter

A gifted deposit letter (sometimes called a gift letter or gift declaration) is a signed statement from the donor confirming:

• The amount of the gift
• The relationship between the donor and the buyer
• That the money is a gift and does not need to be repaid
• That the donor has no interest in the property being purchased
• That the donor will not seek to register a charge or beneficial interest against the property

As a seller, you do not need to see the gifted deposit letter yourself, but you should confirm that the buyer has one (or knows they will need one). If a buyer mentions their deposit is a gift from a parent but does not have a letter in place, this is something that can cause delays later when the mortgage lender asks for it during underwriting. Checking early means any issues can be resolved before they affect your timeline.

Anti-money laundering requirements

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (commonly known as the Money Laundering Regulations or MLRs) require certain businesses to carry out customer due diligence, including verifying their clients' identity and the source of their funds. In the context of a property sale, the regulated parties include:

• Estate agents. Your estate agent is classified as a regulated business under the MLRs. They are required to verify the identity of both the buyer and the seller, and to carry out reasonable checks on the source of the buyer's funds. HMRC's guidance for estate agents makes clear that this goes beyond simply asking for proof of funds — agents must also check that the source of funds is legitimate.
• Solicitors and conveyancers. Both your solicitor and the buyer's solicitor are regulated by the Solicitors Regulation Authority (SRA) or the Council for Licensed Conveyancers (CLC). They carry out their own AML checks independently. The buyer's solicitor will verify the source of the buyer's funds in detail, including requesting evidence of how the money was earned, saved, or received.
• Mortgage lenders and brokers. The buyer's mortgage lender will carry out their own identity and financial checks as part of the full mortgage application. Mortgage brokers are also subject to AML requirements.

As a private individual selling your home, you are not a regulated party under the MLRs and are not legally required to carry out formal AML checks. However, your estate agent is, and you should satisfy yourself that they have done so. The National Trading Standards Estate and Letting Agency Team (NTSELAT) oversees estate agent compliance with these requirements.

Who verifies proof of funds: estate agent vs solicitor

In practice, proof of funds is checked at multiple stages by different parties. Understanding who does what helps you know what to expect and where gaps might arise.

The important point for sellers is that your estate agent is your first line of defence. Under the Estate Agents Act 1979, your agent has a duty to act in your best interests, and checking that a buyer can actually afford to buy your property is a fundamental part of that duty. If you are selling privately without an agent, you take on the responsibility of checking proof of funds yourself beforeaccepting an offer.

When to ask for proof of funds

The right time to ask for proof of funds is before you formally accept an offer. Here is how the timing works in practice:

1. Buyer makes an offer. Your estate agent receives the offer and should immediately request proof of funds if they have not already obtained it.
2. You review the offer and the proof of funds together. The offer amount and the buyer's financial position should be considered as a package. A higher offer from an unverified buyer is not necessarily better than a slightly lower offer from someone with solid proof of funds. See our guide on how to choose the right buyer for more on weighing up different offers.
3. You accept the offer. At this point, you should have seen the buyer's AIP (or bank statements for a cash buyer) and deposit evidence.
4. Solicitors are instructed. Detailed AML and source-of-funds checks begin on both sides.

If you are handling multiple offers, proof of funds becomes even more important. When choosing between buyers, the strength of their financial evidence should be a key differentiating factor alongside offer price, chain position, and timescale.

How to ask diplomatically

Some sellers worry that asking for proof of funds will offend the buyer or put them off. In practice, the opposite is true. A genuine, prepared buyer will have their proof of funds ready before they make an offer. Requesting it signals that you are a serious seller who is organised and ready to proceed, which reassures the buyer just as much as it reassures you.

Here are practical approaches depending on your situation:

• If you are using an estate agent: Your agent should handle this as a matter of course. When relaying an offer to you, they should confirm what proof of funds they have seen. If they have not mentioned it, ask them directly: “Have you seen proof of funds from this buyer?”
• If you are selling privately: When the buyer makes an offer, respond positively and explain that before you formally accept, you need to see their agreement in principle (or bank statements, if cash) and evidence of their deposit. Frame it as a standard step: “This is something I'm asking of all interested buyers before we proceed.”
• If the buyer resists: A buyer who refuses to provide proof of funds is telling you something important. You can offer reasonable alternatives (such as having their solicitor confirm funds on their behalf), but if they will not provide any evidence at all, you should seriously reconsider whether to proceed.

Remember that you are not asking the buyer to disclose every detail of their financial life. You are asking for evidence that they can afford to buy your property. This is a reasonable, standard, and expected part of every property transaction.

Red flags to watch for

While most buyers provide genuine proof of funds without issue, there are warning signs that should prompt further investigation or cause you to reconsider the buyer. For a comprehensive overview of buyer evaluation, see our guide on how to vet a buyer.

• Refusal to provide any proof of funds. This is the clearest red flag. There is no legitimate reason for a serious buyer to refuse basic proof of funds.
• AIP that is expired or about to expire. An AIP that expired weeks ago suggests the buyer is not actively mortgage-ready. They will need to reapply, which may reveal changes in their financial circumstances since the original AIP was issued.
• AIP amount does not cover the purchase price. If the AIP plus the deposit does not add up to the offer amount, the numbers do not work. The buyer either needs a larger mortgage (which may not be available) or a larger deposit (which they may not have).
• Bank statements that look altered. While you are not a forensic document examiner, obvious signs of tampering — inconsistent fonts, misaligned figures, poor image quality, or missing bank logos — should be flagged. Ask your estate agent to verify with the buyer.
• Funds recently transferred in from an unclear source. If the bank statement shows a very large deposit just before the statement date with no explanation, this could be a temporary transfer to inflate the apparent balance. The buyer's solicitor will investigate the source in detail, but it is worth noting.
• Reluctance to explain the deposit source. If the buyer becomes evasive when asked basic questions about where their deposit comes from, this warrants caution. A buyer with nothing to hide will answer straightforwardly.
• Pressure to accept quickly without proof. A buyer who pushes you to accept their offer immediately and promises to provide proof of funds later may be hoping you will take the property off the market before their financial position is verified. Do not accept an offer without seeing proof of funds first.
• Buyer claims to be cash but cannot produce bank statements. A genuine cash buyer will have no difficulty showing that the funds exist. If someone claims to be a cash buyer but cannot or will not produce evidence, they may be depending on funds that do not yet exist (such as proceeds from a sale that has not completed).

If you encounter any of these red flags, discuss them with your estate agent and solicitor before deciding how to proceed. It is always better to ask difficult questions early than to discover problems weeks into the conveyancing process. For more on managing buyer-related delays, see our guide on what to do if your buyer keeps delaying.

Proof of funds checklist

Use this checklist to make sure you have covered the essentials before accepting an offer:

For a cash buyer

1. Recent bank statements (dated within the last three months) showing the full purchase price is available
2. A solicitor's or accountant's letter confirming the funds exist and are accessible
3. If funds are spread across multiple accounts, statements for all relevant accounts
4. If the buyer claims to be chain-free, confirmation that funds are not dependent on the sale of another property

For a mortgage buyer

1. A valid agreement in principle (AIP) from a mortgage lender, showing a lending amount that (combined with the deposit) covers the offer price
2. The AIP should be current (not expired) and in the buyer's name
3. A bank statement or savings account statement showing the deposit amount is available
4. If the deposit is gifted, confirmation that a gifted deposit letter is in place or will be provided to the lender
5. If the deposit is coming from the sale of another property, evidence of the sale progression (memorandum of sale, estate agent confirmation)

For all buyers

1. Confirm your estate agent has carried out identity verification and AML checks
2. Check that the proof of funds documents are in the buyer's name and are recent
3. Ensure the figures add up: mortgage AIP amount (or cash) plus deposit equals or exceeds the offer price

Sources

• Estate Agents Act 1979 — legislation.gov.uk
• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 — legislation.gov.uk
• National Trading Standards Estate and Letting Agency Team (NTSELAT) — nationaltradingstandards.uk
• HMRC — Anti-money laundering guidance for estate agency businesses
• Solicitors Regulation Authority — Anti-money laundering guidance
• UK Finance — Mortgage lending statistics
• Financial Conduct Authority — Mortgages and home finance

Related guides

• Proof of Deposit Explained: What Sellers Should Know

Frequently asked questions