Real Estate Note Owners Biggest First Mistake
Remember the show Ripley's Believe It or Not! hosted by Jack Palance? You would not believe how many
real estate note holders fail to check this most important piece of information about their prospective note
buyers! To find out more read this article so you can avoid making the same huge mistake that most note
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The single most common mistake that a note holder makes when creating a note is that they fail to check
their buyer’s Credit Report. It seems so simple, but it is worth repeating "Most people fail to check the credit
report of their prospective buyers!!" Can you believe this? Just by doing this one simple step can save you a
bunch of money now and in the future.
How so? First and foremost by checking your potential buyers credit score can help resolve your worries of
your buyer’s ability to repay their future debt to you. Heck, I don't know of any bank that would not check
the credit score of any one of their customers seeking a mortgage. So why shouldn’t you?
The second benefit of checking your buyer’s credit score is what if you should ever decide to ever sell your
real estate note, trust deed, or owner financed mortgage for all cash? By knowing your buyers credit score
would not only benefit you now, but it would also make your real estate note more valuable in the future.
Here's why. The first thing a promissory note buyer/investor is going to require to sell your note is your
payer’s credit score! Your buyer’s credit score is paramount to how much money you will ultimately receive
for your real estate note. Of course the higher the credit score the less risky it is to a perspective promissory
note buyer, thus making your note more valuable to them and ultimately you.
So, just what is an acceptable credit score concerning a real estate note? That is entirely up to you, but if it
was my note I would not accept a score of less than a 550. The credit score counts for 40 percent of a total of
100 percent in rating your real estate notes value. So whether you are creating or selling your real estate note
it pays to get your buyers credit score in more ways than one.
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