Posted by soapymac on May 18, 2000 at 08:40:32:
Alan,
Checking the buyer’s credit is generally the responsibility of the entity providing the money to complete the transaction. If a mortgage company/bank is the lender, you bet your bippy they are going to do a credit check.
But what if the money is being provided privately? If the seller is doing seller financing, s/he may or may not, depending on the type of transaction. If the transaction is a contract for deed, or 100% seller financing, they may not need a credit check, because if they are smart, and the buyers don’t pay, they can foreclose and re-sell (a “Lonnie Deal” on property.)
If there is a mortgage created, and the seller takes back a note…then later on tries to sell that note to cash out, the notebuyer is going to look at three things; the history of payment, “aging” of the note, and your ability to continue to pay the note. This last one is where a credit check will again enter the picture.
Lastly, if a seller or their successor DOES NOT check the buyer’s credit…well, let’s not go into the neggies here.
Cordially,
Roy MacLean
“soapymac”