Can a seller demand the buyer prove financing is actually in place before signing anything?

Yes — a seller is entitled to ask for this, and doing so before investing significant time in negotiating a full purchase agreement is common, sensible practice, particularly for a seller who has been approached by a buyer they don't know well. There's no obligation on the buyer's side to volunteer detailed financial information unprompted, but a seller can reasonably make continued negotiation, or even signing a letter of intent, conditional on receiving some comfort that the buyer can actually fund the purchase.

What "proof" looks like in practice varies — it might be a bank or lender pre-approval letter, a statement of available funds, or simply a credible explanation of the financing plan, and sellers should calibrate how much detail to insist on against how far along the deal actually is; demanding a fully binding financing commitment before any terms are agreed is often unrealistic, while asking for nothing at all until the eve of closing is genuinely risky.

If you're a seller dealing with a buyer whose ability to pay is unclear, raising this early, and building appropriate financing-related conditions into the letter of intent and purchase agreement, is exactly the kind of protective step a Treadstone business lawyer can help structure.