How Do You Broach Creditworthiness and Income with a Buyer?
You have been trying to sell your property, and have someone interested in buying it. Hold on before you pop that champagne cork, there is still a long road to travel before the papers are signed and the moving trucks can be called. You don’t know too much about the potential buyer. Can the buyer afford the purchase and what about their credit? Will they be able to get financing? The biggest question is how do you broach the creditworthiness and income with a buyer?
With such a volatile real estate market, it is now common and necessary to request a complete financial disclosure and run a credit check on your potential buyer. You want to check for their creditworthiness and verify their income before you stop looking at other offers. You need to make sure that your potential buyer has the credit and income to obtain a mortgage, and that they won’t run into problems down the road. Continue to look at other offers and continue showing the property during this time.
Contact the prospective buyer’s employer to verify that they are indeed employed. Check for how long they have been employed with this particular employer and what their current salary is. Employment is very crucial in obtaining financing from a financial institute. If the buyer doesn’t have a solid employment history, they may potentially run into problems securing a mortgage. It is better if the buyer has been employed with the same company for several years. It won’t look good if they have only been employed for a couple of months.
The credit check can be run by several different agencies. The buyers FICO score is a good indication of their credit history. If they have a low FICO score, they will most likely have a difficult time getting a mortgage. They could run into problems as well if they are over burdened with debt.
Ask to see proof of their down payment. Potential buyers need to have the down payment for the home, including the closing costs and fees already in the bank. If they cannot show proof of this, they won’t be able to get the financing needed to purchase the home.
While running a credit check, you may also consider running a background check and follow up with their personal references. If they are currently renting, check with their landlord and see if they have been paying on time. You want to be sure you won’t run into any serious issues with your potential buyer down the road.
Checking the creditworthiness and income of a buyer should be the first step you take to help ensure the purchase of your property will go smoothly. This will help you be better prepared for potential delays and problems with the buyer securing a mortgage. And you won’t have any surprises. Broaching their creditworthiness and income will help ensure you have found the right buyer for your property.
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