A newbie question...how to handle clients who don't qualify...

[ISellRiverview]

I just wanted to ask other agents how they handle it when clients don't qualify for a home due to credit issues, etc. My understanding is that, from a financial standpoint, its not worth my while as an agent to take them out to see rental properties because the commission on rentals is hardly anything and not worth the gas of taking people around. Do you refer your clients who can't buy to a rental agency or what do you do? I've had some clients who didn't end up qualifying for a loan that now want me to take them out to see rental homes and I just am not sure that's worth doing. What would you/do you do?

[jasoncrouch]

If they won't qualify for a mortgage at all because their credit is too rough, it may actually be hard to get a rental home as well. It really depends on the landlord/property management company. I don't always take these people myself, but I have a few times, and they are usually a very loyal referral source. Sometimes I do refer them to another source.

[JimOlenbush]

You can always send them to a property management company that has lots of rental inventory. Like Jason said they may not qualify for a rental either. Imagine taking them around and having their lease application denied! There is not a whole lot that you can do with those leads.

[Dan Connolly]

Refer them to a credit counsellor like CCCS. In a lot of cases after 1- 2 years in a good credit repair program they will qualify for FHA loans. If they have huge collections they can never pay back, bankruptcy may be an option, with clean credit 2 years after a chapter 7 they can go FHA. With 12 months of ontime payments to a credit consolidator (a reputable one) and no other late paymetnts they may qualify for FHA after 1 year. Sometimes that is the best help you can give them.

[ISellRiverview]

I did refer them but they need to find a new home now...I guess I need to find someone to refer people to.

[Micheal Pannell Realtor]

I have a credit repair company in my office, They get these people and then when they get done we sell them a house

[docmuller]

I would be very careful referring anyone to CCCS. In my experience as a loan officer, many lenders now look at CCCS as a bankruptcy. I have had clients file complaints against their Realtor for referring to CCCS and not realizing the implications to their credit. I have had success with a company called Axiom Financial. They have been able to raise a couple of my clients credit scores as much as 100 points in only 3-4 months. The problem is they are so expensive that most people with credit problems cannot afford them. They have only worked for me more affluent clients who typically had a small business BK in the past.

[Dan Connolly]

Yeah CCCS is like a chapter 13 bankruptcy. I tell them that going in. That's is why it takes a year and FHA is the best option (maybe the only good option) coming out.

I would like to find out other credit repair options though. Who is your in house company Mike? Is it part of a national company or an independent? Most of the ones I have seen are spotty at best.

[Micheal Pannell Realtor]

i didnt say cccs, I said credit repair. We do our own.

[JimOlenbush]

Dan mentioned CCCS above your post.