Posted by David S on March 31, 1999 at 08:39:09:
John, thanks for your concern. The average consumer report is 7-9 pages and for many years I used the reporting agencies. When there was a default, I always looked back at the report to see where I made a mistake in calculating the risk… bottom line is, with these type home buyers, it doesn’t seem to matter. There are going to be defaults. The key for me was to try to understand how I could handle this in my qualification process. What I found was that everyone has ‘fear’ and my method of qualification covers that element quite well. I am only concerned with wage garnishments so we do call the employer for that info. This works well in the local market as you are in contact with someone that knows the buyer.
It is my opinion that if you qualify your prospective buyers properly, you won’t have too many problems, good or bad credit risk. Let’s face it, before the negative report, these people were clean as a whistle.
I’ve had several buyers default over the years and it always seems it’s the ones with the best jobs, fancy cars, nice clothes, etc that fall out of bed first.
That is why I developed this production:
“As you know Eddie and Mary, I work with the company that gives buyers a chance to own their own homes, 1st and 2nd chance. Let me explain what my supervisor thinks of this program. He hates it!
Now I try to help anyone I can Eddie and Mary, but I can’t help anyone that won’t help themselves, nor can my supervisor. He’s heard every excuse know to mankind about why someone is 1 day late here, 4 days late there, etc. I’m sure you can imagine all of the silly excuses he has heard over the 20+ years he’s been in this business. So, let me tell you this; If he helps you get this home, he’s not going to hear your mother died, your child has a brain injury, the cat was sick, or any of those stupid excuses many people just like you use to keep from paying their bills. he needs his money on time, every time. The first time you are late just 5 days, he’s going to call me and I’m going to come back and live with you folks until the sheriff gets here with your eviction notice. If you are going to have a problem paying on time, lets just call this off and be friends.” Some walk, most don’t.
Simple, to the point, reduced default and vacancy rates to almost nothing. I’ve had tenant/buyers live in homes without power, get furnature and cars repo’ed
but we almost always get paid on time.
I think everyone starting in the business should use credit reporting agencies, even though these agencies
also have faults and sometimes inaccurate information.