Hey everyone I just purchased an ebook from David Matthew “The Investor Today” that has a lot of really good information on the lease option technique that I am going to put to use.My question is where can I find a good form to pre-qualify my buyer/tenant over the phone?I have some of the basic questions that I need to ask already but would like to find a simple form with more in depth questions?Any advice would be appreciated.
This business is really very simple, so be careful that you don’t over-complicate it unnecessarily. After 10 year in this business here’s a pearl of wisdom for you:
Q1: Do you have a job?
Q2: How much do you make?
Q3: Do you have $X to put down?
Q4: When do you want to move in?
In the words of the great Merle Woolley: “I don’t need a piece of paper to tell me my tenant/buyer’s have bad credit. If they didn’t have bad credit they wouldn’t be talking to me.”
Yeah that puts it pretty easy. Just those basic questions will work.
I sell on owner finance which is similar to LO. Premise is the same: most buyers have credit issues. Some just can’t get a loan becuz of other reasons but in all, I never ask the first 2 questions above. Also, I have never run a credit check or done anything close to bank qualifying. I’ll state in my ads the mo pmnt and $ down and that qualify the seller for me. Those are the 2 key deal sellers.
Rog, you should have 2 or 3 pre-qualifying questions for your potential tenant/buyers:
We do check your credit, although we can deal with credit problems. Do you have any idea what your credit looks like? Now, this tells people that you will check credit, but they also know credit issues are accepted too. Obviously you will not want ppl with very recent bad credit (i.e bankruptcy within last few months). Skipping ahead a bit, if the person passes my questions overall, and the t/b likes the house during the walk through, I get them to fill out my mortgage brokers mortgage application which allows my broker to check their credit before they move in so that I can verify what I’m dealing with financially. I’m all about making my backend money. Most ppl after I ask this question I find out are completely honest and will just tell me. They may not know their actual FICO score, but of course they will know if they are behind in something, or even if their credit is pristine which happens too from time to time.
How much are you comfortably able to afford per month on a new home? Now, in most cases here I don’t really ask this question. Meaning, if the payment is low enough on the house (compared to FMV rents in the area), I would want to advertise my low payment all over the advertising of this house (signs in front, directional signs, newspaper ad etc). If it isn’t a REALLY low payment, I’ll ask this question.
There is a deposit required. It does have to be a few thousand, but I can be flexible. Do you have any idea of how much you would have to put down on your new home? My absolutely minimum that I’d accept is 3%. Most of the time my minimum is closer to 5% because of all you calls you attract. However I never name the number I’m looking for because it is very possible the caller has more than what I need upfront.
Once your callers pass those questions favorably in your mind, I’d go ahead and give them the address to the house (if they don’t already have it) to do a drive-by inspection first. If they like what they see and call back, I’m pretty sure I’ve got about a 90-95% chance that they’ll show up when its time to see the house. There will always be potential t/b’s that don’t show up. At least that has been my experience. That could simply be because they know based on the questions you asked them initially that although you can handle their issue you WILL in fact check their backround, call their work, check their credit and find out everything about them.
Snort and sweet. Good advice!