Buyer credit score ?

Question

I'm considering buying a used mobile home and offering seller financing (classic Lonnie deal). What credit score do y'all look for when qualifying potential buyers? Obviously a stable job history is important too, but what else do you consider and where do you draw the line when evaluating potential buyers?

John Fedro · Answer

Hey Scott,

It would probably be a great idea to always run a credit check on every buyer over 18 living in the home.  Or at least have them pull a "free credit report" and hand it to you at closing. This is always great to have just to know for sure who you are really selling to.

Remember unqualified buyers usually have a history of screwing others over and poor credit.

On the other side of the coin not all negative credit is as bad as other. Here's what I mean; I will happily sell a home to a buyer with a poor credit due to foreclosure or perhaps minor past due hospital bills. But I will walk away from a buyer with many over due credit card bills that they simply did not want to pay.

Each buyer is different and should be looked at in their unique situation.  Keep in mind most people who call to live in a mh in a mhp will not be qualified by our experience. But you only need to sell to 1 good buyer who will pay you for years.

-John

Terry Drake · Answer

Basically if you are working in a good mobile home park, they will do a good job of screening people.  My buyers pay for the park application and if they are approved by the park then they are good enough for me.  I can tell you typically the park is ok with a 600+ credit score as long as there are no collections, clean background, ect.

Keith Canyon · Answer

one more time...i just wanted to add-- that's the great thing about this business--when you are in the position to be able to, you can sometimes tailor a sale to your buyer, so it is indeed a win-win for both parties.  if your sale is structured properly with your specific buyer, you may have an on-going client/customer for life, plus great referrals and new business from those referrals!  
too bad i never got so passionate about all the other "jobs" i've had along the way!

best success,

sage

Keith Canyon · Answer

hey scott, i may be "technically" wrong, but i'm going to suggest that each situation may require to look at your potential mh buyer a bit differently, or a bit beyond their score.  reason i say that is because sometimes those buying used mobile homes may just be in the process of rebuilding/re-establishing credit.  i would look more at what you said, a decent stable job history, and i would focus a fair amount on their ability to pay for the purchase: do they have the down payment money, do they earn more than enough to make their payments plus living expenses, etc., etc.  i think you have to know your buyer in this situation, like every sale situation, and use your intuition along with obvious cash, willingness on buyer to make their obligation, references, and work history, and perhaps that mighty score.

best success,

sage