Private money
A loan from an individual rather than an institution. Common in investor circles. Terms are whatever both sides agree to. Usually secured by the property.
Your Room opens on showings and offers, with everything before the listing already ticked.
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See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
An investor's offer may be funded by an individual rather than a bank. It can close fast, and its reliability is the reliability of that one person's money, which is why proof of funds matters more than usual.
Part 2 of 4
A simple example
A buyer offers a 14-day cash close, funded by a private lender who is a family friend. Their proof of funds is that friend's bank statement.
| What you ask for | Why |
|---|---|
| Proof of funds from the actual source | The money is real only if the lender's account is |
| A short financing contingency, or none | Private money has no underwriting; the risk is the lender changing their mind |
| A meaningful deposit | Because there is no bank to keep the buyer honest |
Private money is only as sure as the person behind it.
Part 3 of 4
What people get wrong
That private money is cash. It is a loan from a person, and a person can decide not to fund.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines private money in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.