According to the National Association of Realtors, parents gifting money to their children to help purchase a first home is a common experience. Gifting money is a type of down payment assistance that can help them realize their dreams of homeownership.
Should Re-Performing Loans Affect the Buyer You Choose?
When considering the offers from buyers who are interested in buying your home, who would you be more likely to choose; the buyer with a history of making their payments on time or the buyer who has a history of being unable to pay? Naturally, you’d prefer the buyer who has a good payment history. But does that mean you should never take into consideration buyers who have re-performing loans, even if they have a good offer? It depends.
Are They Able to Pay?
Even if the buyer with a history of re-performing loans has a better offer than other buyers, they should be looked at with a critical eye. With their history of re-performing loans, the buyer has shown that they have been unable to keep up with payments in the past—even if they did begin making payments again.
If the buyer has filed for bankruptcy and is still paying off what they owe in deficiency judgments, it’s a good idea to move on to other buyers. There’s no guarantee that the buyer will be able to make payments after purchasing your home while still paying off their old one.
Do They Have Financial Assistance?
Not all buyers with re-performing loans fell behind because they were negligent with their finances. Many may have lost their job or had unexpected medical issues and are now reemployed and healthy again. If the buyer has bounced back and has financial assistance like a grant or down payment assistance, it doesn’t put them out of the game altogether, but you should still do your research.
Are You Willing to Negotiate?
Just as you expect the buyer to be flexible, you should extend the same courtesy. If the buyer is paying in cash, then they won’t have a mortgage to pay off to begin with, so you could safely consider them as a buyer and negotiate with them for a deal that will favor all parties.
In the end, the decision to consider an offer from a buyer with a history of re-performing loans is up to you. You deserve to be able to sell your home with peace of mind knowing that the buyer will actually be able to buy the home.