In real estate transactions, buyers sometimes include a name change clause in their offer, allowing them to switch the name on the property title to a different person before closing. This clause can be concerning for sellers, who may suspect that the buyer intends to “flip” the deal to another buyer for profit. However, buyers often add this clause for mortgage reasons, such as securing financing or adding a co-borrower.
Should Sellers Be Concerned?
A name change clause can be harmless, but sellers should still approach it with caution. Some sellers may worry about the buyer’s intentions, especially if they suspect a quick resale for profit. To address these concerns, sellers or their agents can take protective measures to ensure that the transaction proceeds smoothly.
Adding an Extra Line for Protection
To safeguard both the seller and the transaction, experienced agents like Leo Shiu recommend adding an extra line to the agreement. This line states that in the event of a name change, the original buyer remains jointly liable to complete the transaction. This means that if the buyer changes the name on the title, they are still responsible for fulfilling their contractual obligations, reducing the risk of complications for the seller.
Real-Life Example: Ensuring Peace of Mind
Leo Shiu encountered this situation while selling a property where the buyer included a name change clause. Leo’s client was concerned about the potential risks, so he added the additional line ensuring the buyer’s liability. This extra precaution gave the seller peace of mind, and they proceeded with the sale confidently.http://free
Conclusion: Flexibility and Caution in Real Estate
In real estate, balancing flexibility with caution is essential. By understanding why name change clauses are used and implementing safeguards, sellers can navigate these situations effectively. For sellers, working with an experienced agent who anticipates these issues and protects your interests can make all the difference.