5 steps to financing a sale

September 08, 2009
Author: The Wall Street Journal, June Fletcher

Selling a home and helping the buyer finance may be a good option to getting a house sold, experts say. Yet it is imperative that the seller thoroughly investigate the buyer’s finances before agreeing to the deal.

Here are some important initial steps to take:

* Investigate the buyer by asking him to fill out a Uniform Residential Loan Application.

* Get bankruptcy details by checking out the case through Public Assess to Court Electronic Records (PACER), a service of the U.S. Judiciary.

* Pull the buyer’s credit report and eviction and criminal history via the American Apartment Owners Association Web site.

* Insist on 20 percent down or offer a contract for deed, which only confers full ownership rights after the home is paid off.

* Consider offering a lease-option with part of the payment going toward the purchase price, which gives the buyer time to repair his credit before seeking conventional financing.