Examining the strength of a buyer’s finances is crucial to ensuring that a transaction proceeds smoothly. Ensure that you have gathered all of the relevant information before you accept a Purchase Contract for your property.
Offer Details
Evaluate the Offer: Look at the offer terms, including the amount being offered, the earnest money deposit, and any contingencies. A strong offer typically includes a substantial earnest money deposit and fewer contingencies.
Assess the Buyer’s Flexibility: Determine if the buyer is flexible with closing dates or other terms, which can be important for a trouble-free transaction.
Pre-Qualification/Pre-Approval Letter
Request Proof of Financing: Ensure the buyer has been pre-approved or pre-qualified for a mortgage. A pre-approval letter from a reputable lender indicates that the buyer has undergone a credit check and provided financial documentation.
Verify the Lender: Confirm the legitimacy of the lender who issued the pre-approval. A reputable lender will often be more reliable.
Financial Stability
Review Financial Documentation: Ask for proof of funds, especially if the buyer is making a cash offer. This can include bank statements or a letter from a financial institution.
Check Credit History: If possible, review the buyer’s credit report to assess their financial responsibility. This would be more common if you are carrying part of the loan balance for the buyer who is purchasing the home.
Use a REALTOR®
Leverage Professional Expertise: REALTORS® have experience with assessing buyers ability to purchase a home, and they can provide valuable insights. REALTORS® can also handle the paperwork and negotiations.
Fair Housing: REALTORS® adhere to the Fair Housing Act, and will assist you to ensure that you abide by these mandatory federal guidelines.
By following these steps, you can better ensure that the buyer is legitimate, financially capable, and committed to purchasing your home.
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