Author Topic: Selling house to someone with poor credit  (Read 649 times)

OffTheGrid

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Selling house to someone with poor credit
« on: March 02, 2018, 10:04:41 AM »
BG: Tried renting out a house to earn extra money.  Didn't work out.  Reasons why are unimportant to this post, except to say they are lessons learned.  I need to sell. 

Have a buyer who is interested in the house and agrees on my price.  Making this sale (at that price) would cut me free of what I owe on it and (maybe) allow me a very slim profit.  Problem is: the buyer (despite having a long work history and steady income) has subpar credit.  As in, a low, but not rock-bottom score.  Buyer has been turned down for one loan, but I don't think that has to be the end of the story.  There's no doubt buyer could make the payments (they are in a situation where a mortgage would be vastly cheaper than rent), but some previous bad decisions are haunting them (I can relate).

There has to be an answer here.  We have someone willing to buy, someone willing to sell, and a price agreed upon.  All we lack is the loan to make it happen.  Is there a somewhat creative way to make this happen?

Fishindude

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Re: Selling house to someone with poor credit
« Reply #1 on: March 02, 2018, 10:20:10 AM »
If you don't need the money all at once and you really trust this guy, sell it to him yourself on contract.
Just understand that he has a poor credit score for a reason and sometime during this payoff plan you may have to get nasty with them to collect payment and / or kick them out and repossess the home and start over.

turketron

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Re: Selling house to someone with poor credit
« Reply #2 on: March 02, 2018, 10:23:57 AM »
  There's no doubt buyer could make the payments

The bank doesn't agree with this statement, otherwise they'd have given them a loan. They should try other banks until they find one that will give them a loan. As far as creative solutions, a private agreement as Fishindude mentioned might work.

https://www.bankrate.com/finance/mortgages/mortgage-application-denied-dont-despair-1.aspx

robartsd

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Re: Selling house to someone with poor credit
« Reply #3 on: March 02, 2018, 11:00:07 AM »
If you simply need out of this house, it will be up to the buyer to secure the financing needed to purchase. Buyer can apply to other lenders and/or find someone that trusts him enough to cosign. Is the buyer pursuing this under first time homeowner programs (usually must not have been a homeowner in last 5 years). Otherwise you can look for another buyer.

If you're OK taking time to get out of this house, you can consider an owner-financed contract or a rent-to-own contract. I highly recommend you do plenty of research before you agree to either of these options and be sure you're pricing the additional risk you're taking into the deal.

Cwadda

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Re: Selling house to someone with poor credit
« Reply #4 on: March 02, 2018, 11:03:24 AM »
  There's no doubt buyer could make the payments

The bank doesn't agree with this statement, otherwise they'd have given them a loan. They should try other banks until they find one that will give them a loan. As far as creative solutions, a private agreement as Fishindude mentioned might work.

https://www.bankrate.com/finance/mortgages/mortgage-application-denied-dont-despair-1.aspx

This.