If you are agreeing to carry a note in order to sell your property, you should be determined to know your buyer as well as you know your spouse. You may not be married to your borrower for the rest of your life, but 5-10-20 years is a pretty long time! After 11 years in the note business and having talked to thousands of note holders, the biggest mistake they make – by far – is not knowing their buyer. What do I mean? Here is a short list:
- You have no idea of your buyer’s credit score or history.
- You have not established that your buyer can comfortably afford the monthly note payment.
- You are not sure what your buyer does for a living or where he works.
- You are not sure about your buyer’s connection to his new neighborhood.
- You aren’t sure how many people will be living in the home.
- You aren’t sure if other people – not on the note – will be contributing to the note payments.
Sometimes we have to ask questions that may make us uncomfortable, but, are necessary. Being open and honest with your buyer should strengthen your relationship with him and help establish trust and good communication. Do your best to Know Your Buyer.
