Wholesaling: My Seller Needs Credit Check

13 Replies

Hi everyone,

This is my first post on BiggerPockets AND my first potential wholesale deal. I have been talking with this seller for a few weeks and he has finally agreed to sell to me. The only issue now is that he needs me to pass a credit check before he can/will sign my purchase agreement. 

Now this might sound completely naive of me, but please bare with me as I am completely new to wholesaling and even real estate as a whole. I have been doing tons of research on everything wholesaling and real estate, but am stumped on this seemingly last piece to my first deal puzzle. 

Is it okay for me to do a credit check myself? Do I need to have my buyer perform the credit check? Is there any other way to appease his needs of a credit check in this situation without actually performing one??

Any and all answers to my question would be tremendously appreciated and valued! I am a living breathing real estate sponge and will absorb all info you fellow BiggerPockets members can give me!

Thanks in advance and looking forward to learning/speaking/reading your responses!

Lacey

It sounds like your seller wants you pre qualified for the loan to buy the property . A credit check tells someone if they pay their bills . I have a 809 credit score , but that doesnt mean I can buy a 2 million dollar house . But someone with a 700 credit score could if they have the income 

@Lacey Haessler welcome to BP.

This is out of the ordinary. i would not allow him to pull my credit. I might pull one myself to give him. Sellers want to know you can close a deal. I sell a lot of properties to other investors. I have never asked for a credit report but I do want them to tell me how they are going to be able to pay for this.

One way to put a seller at ease is to give a bigger deposit. 

@Ned Carey I have offered to increase my EMD but he still won't budge. I didn't think about pulling one myself though and will definitely reach out and see if that's something he would be interested in, thanks so much for your response!

@Lacey Haessler Seller has probably had a bad experience with a wholesaler before. Its strange that he wants your credit information since you arent getting a loan to buy the property. I would want a pretty good explanation as to why a seller wanted my credit info before I would hand it over. Have you considered that this might be some kind of scam? If You are paying cash for a property or using hard money your credit is irrelevant to him as a seller. He should be asking for a proof of funds letter. Something seems off about this.

@Lacey Haessler it’s definitely not a normal request but as long as your credit is good i dont see why you wouldnt do it to close the deal. Have you checked your credit on sites like credit karma or wallethub before? Its completely free and they are soft pulls so no damage to your credit no matter how many times you pull. Maybe print out your credit from one or more of those sites and see if that would appease the seller?

do not do a credit check ……….

 This sounds like a scam run as fast as you can...………..whole sale do not do credit checks to write up properties/

maybe you should learn a little more on youtube university school about the process of wholesale a property before you

start...

Originally posted by @Lacey Haessler :

Hi everyone,

This is my first post on BiggerPockets AND my first potential wholesale deal. I have been talking with this seller for a few weeks and he has finally agreed to sell to me. The only issue now is that he needs me to pass a credit check before he can/will sign my purchase agreement. 

Now this might sound completely naive of me, but please bare with me as I am completely new to wholesaling and even real estate as a whole. I have been doing tons of research on everything wholesaling and real estate, but am stumped on this seemingly last piece to my first deal puzzle. 

Is it okay for me to do a credit check myself? Do I need to have my buyer perform the credit check? Is there any other way to appease his needs of a credit check in this situation without actually performing one??

Any and all answers to my question would be tremendously appreciated and valued! I am a living breathing real estate sponge and will absorb all info you fellow BiggerPockets members can give me!

Thanks in advance and looking forward to learning/speaking/reading your responses!

Lacey

 Sounds like seller doubts you'll actually close the deal and they are looking to see if you have the ability to close the deal. 1st off do you? If the answer is yes get pre approved by a lender or provide them with proof of funds in the form of a bank account screenshot showing enough money to buy the property. If you don't have the ability to close on the deal do not put it under contract as that would be brokering real estate without a license which is shady and in most cases illegal.

@Lacey Haessler ,

I used to have great credit, then I borrowed a lot off my cards to finance a business startup.  It's doing well and was a good investment, but for the time being my credit score has tanked.  It's a small part of my motivation to get Wholesale going strong -- I want my 800+ score back!

That said, I would tell the seller exactly what I'm doing and why my credit score shouldn't be a factor.  I'm curious if he isn't all too motivated or just extra cautious.  IF I were to decide ultimately to show him, I would do a screen shot from CreditKarma.com showing both my credit scores and my on-time payments, which are perfect.  At least I'd do something to give me a warm fuzzy about me.  Put some positive spin on it.

I would not let him run his own credit report on me, though.  I would not give him the personal information and/or permission to access such sensitive information.

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