Your average vendor finance buyers already know they can’t get a traditional home loan. So when they contact you regarding buying one of your homes, it’s worth remembering they probably see you as their last chance of home ownership in the foreseeable future, i.e. they’re very motivated to get your approval.
Collect and Verify
So motivated in fact they may be prepared to avoid answering questions, tell half-truths and straight out ‘porkies’, in an effort to secure a family home.
The way to avoid the damaging consequences of receiving the wrong picture of your prospects financial position, is to have a method of collecting and verifying your prospects financial position. A structured Application and Qualification process works best.
The Spoiler – Holding Costs
Having a structured Application and Qualification process is easy. Sticking to it is the difficult bit! Motivated buyers are masters at not answering all the questions on your Application Form and giving you information that can’t be verified during your Qualification process.
Be tough! It’s so worth it in the long run.
Our experience, administering all types of vendor finance transactions in Vendor Finance Management, show classic symptoms of a poorly qualified buyer. Over and again, these buyers start to fall behind around the 3 month point. This is the point where the excitement of their new home has largely worn off and other lifestyle costs start to get a higher priority for payment than their home payment.
The grief these buyers will cause you is substantial but, as mentioned above, largely avoidable.
The Double Whammy!
Won’t happen to me I hear you say but just wait until you a lumbered with holding costs on the property you’re trying to sell. The psychological pressure to just ‘get somebody in there’ becomes difficult to fight. From the trouble we’ve seen these buyers cause, believe me, the fight against short cuts in your Application and Qualification process is worth it.