Credit check: Can the prospective buyer afford your property?

Have you found a sympathetic buyer for your property and got everything signed and sealed at the notary appointment? But suddenly the financing falls through. No money from the buyer. The purchase contract has to be rescinded. And the other previous potential buyers are no longer interested in your property either. Now the marketing process has to start all over again. A credit check could have avoided this situation.

Reversing the sale of a property and marketing it again can result in financial losses. If property seekers rediscover a property that should have already been sold, they become skeptical and wonder whether there is something wrong with the property. This can have a negative impact on the sale price. Professional estate agents therefore carry out credit checks.

Assessing risk

Before signing the purchase contract, real estate sellers need to know whether the prospective buyer can afford the purchase price and ancillary costs. This is because service charges are joint and several costs. This means that the buyer and seller must pay them. If the buyer does not pay the land transfer tax, for example, the tax office can ask the seller to pay. The seller would then have to claim the land transfer tax from the buyer. The same applies to notary fees.

Check creditworthiness - credit agency

There are various ways to check the creditworthiness of a buyer. One is to obtain information from a credit agency such as Schufa. These usually only provide information if you are a member - however, the fees for this are often high. In addition, a "legitimate interest" is required for the provision of information in accordance with Section 29 (2) of the Federal Data Protection Act (BDSG). Proving this requires some formulation skills.

Check creditworthiness - self-disclosure

Another option is for the buyer to provide self-disclosure. Sellers can agree with the prospective buyer that the prospective buyer will request a self-disclosure from, for example, Schufa and send it to the seller. Sellers should make sure that the information is up to date. It should contain the prospective buyer's personal data, score values that enable a risk assessment and positive and negative payment histories.

Check creditworthiness - financing commitment from the bank

Another option is a financing commitment from the prospective buyer's lending institution. Sellers should ensure that the financing is secured if the loan is expressly intended to finance the property and the disbursement of the loan is not linked to additional conditions that could prevent payment on time.

Would you like to make sure that your prospective buyer is solvent? Please contact us! We will be happy to advise you.

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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