How To Check Your Buyers Credit
by Lorelei Stevens
If you are considering seller financing the sale of your real estate or
business, you should obtain a credit report on your prospective buyer.
Without factual knowledge of your buyer's credit standing, you cannot make an
informed judgment about accepting or rejecting your buyer's offer. After all,
you will create a note that extends a large amount of credit to your buyer. No
bank or mortgage company would extend similar credit without a credit check.
Don't be reluctant to ask for a buyer's credit report for fear of seeming rude
or untrusting. If there are problems, the time to find out is before you accept
the buyer's offer. If you neglect this step and later discover problems with
your buyer's credit, you may not be able to get a good price for your note if
you ever need to sell it for cash.
The easiest way to obtain a credit report on your buyer is to ask the buyer to
obtain their own credit report and then furnish you a copy. Credit reporting
bureaus will not send your buyer's credit report to you because of privacy laws.
However, for a small fee, they will send your buyer's credit report to the
buyer.
Here is what to ask your buyer to do: First, they should contact one of the
following national credit reporting bureaus:
- Equifax
- Experian
- Trans Union
Then, have the buyer ask for his or her own credit report. Last, ask the buyer
to give you a copy.
If the buyer refuses to provide a credit report, refuse to sell. No credit
report, no sale.
Bio:
Lorelei Stevens is president of Wall Street Brokers, Inc. in Seattle, Washington.
She has been a licensed real estate broker (Washington State Real Estate Brokers
License WA-LL-SB-*275LD) and a discounted note buyer since the 1970s. She has
worked her entire adult life with Wall Street Brokers negotiating millions of
dollars of paper and is a nationally recognized expert.
Lorelei has taught Legal Continuing Education seminars and has written numerous
articles for legal, real estate and other professional publications on the
subjects of seller-financing, managing, reinforcing and buying paper. She is the
author of two books, one on seller-financing and another on note buying. She
also writes a monthly column for Noteworthy Newsletter and is a frequent
contributor to The Paper Source. Her web site is www.WallStreetBrokers.com.