Buyer wants to change buyer name to an LLC last minute

[Sam Leon]

Selling a property and went under contract in early July scheduled to close in two weeks.

So far all contingencies have been met and suddenly the buyer wants to sign an addendum for a name change from "John Doe" to "whatever LLC".

Since the buyer is seeking financing from a conventional lender, and I think most residential lenders do not lend to LLCs, I am thinking the name change will cause the loan to be denied, and my attorney suspects this may be a way for the buyer to seek to exit without any penalty.

It seems unusual to do a name change like that in the last minute, any thoughts on the best way to navigate this

[Doug Smith]

Get a copy of the loan approval to the LLC...in the LLCs name. That is not all that uncommon. Perhaps they decided to run it DSCR or use some other type of financing that requires it. I wouldn't be as spooked as you seem to be, but I would certainly check out 1) who owns the particular LLC in question with the state and 2) confirm that they have, indeed, been approved with a lender in the name of the LLC. You can always also call the lender on the preapproval to ask questions. One other item of note, you'll have to do the addendum when you change the name. Simply make the EMD hard wtih an additional clause in the addendum when you do and/or request more EMD. If they are serious and all hurdles have been cleared in the lending process, they shouldn't have an issue, but no one is forcing you to put yourself in a worse position. You still control whether or not to sign the addendum, but I certainly wouldn't immediately question the motives of the buyer. "Trust but verify"