Why Sell My Mortgage Note?

Owner financing seemed like a good idea at the time. Let the buyer make payments and get the property sold. After all the seller carry back is known for attracting purchasers and providing quick closings, without the hassles or fees of a conventional bank loan.

But circumstances change and many sellers would prefer a lump sum of cash today rather than monthly payments that trickle in over the next 10, 20, or 30 years.

If you are receiving payments on a mortgage, trust deed, or contract there are investors eager to purchase all or part of the future payments. Note buyers run ads and mail postcards leading many to wonder,

“Should I sell my mortgage note?”

Here’s a look at the top 5 reasons people sell mortgage notes:

1. Pay Bills

Reduce debt or pay expenses including medical bills, college tuition, credit card balances, and home repairs. Pay down a home loan or payoff an existing mortgage on the property sold.

2. Peace of Mind

Eliminate the hassles of paperwork, payment collections, and IRS reporting. No more monthly worries wondering if the buyer will:

• Make payments on time
• Take care of the property
• Pay taxes and insurance
• File bankruptcy, or
• Go into foreclosure

3. Make an Investment

Start a new business, fund an IRA or retirement account, buy another piece of real estate, or make a profitable investment.

4. Settle an Estate, Divorce, or Partnership

Distribute partial ownerships or settle disputes for notes involved with an estate, probate, dissolution of marriage, bankruptcy, partnership, or other entity.

5. Enjoy Life

Take a dream vacation, fulfill a passion, enjoy retirement or buy a new car, boat or RV.

Know Your Options When Selling Mortgage Notes

You don’t have to sell the entire cash flow. Depending on the goals, selling just a portion of the payments might be a preferred choice.

Investors are willing to purchase a certain amount of each payment (say $500 per month out of a $1,000 payment) or just some of the payments (say the next 5 years out of the remaining 30).

Known as a partial purchase, this provides access to some of the cash now with interest and payments still accumulating for future use. It also helps minimize the discount since the payments due sooner are worth more to an investor.

Selling a note is not the right answer for everyone. There’s a potential loss of interest income and tax benefits. Some high-risk notes just won’t be marketable for a price that makes sense.

However, it pays to know your options. Most investors are willing to provide a no cost no obligation quote for review with a CPA or attorney to help find the best solution for your personal situation.

Wondering how to reduce the discount and sell your mortgage or trust deed for top dollar pricing?  Be sure to grab your copy of 21 Insider Secrets You Must Know Before Selling an Owner Financed Note, provided as a free bonus with any purchase of the Note Buyers Directory.

Owner Financing vs. Seller Financing – What’s In a Name?

As cash flow note brokers we know that owner financing happens when the seller of property accepts payments over time from the buyer.

This creative financing helps buyers purchase homes without traditional bank loans. Read more

Get Reliable Pricing When Selling a Mortgage Note!

Wondering whether to trust the pricing for the sell of a mortgage or land contract?

Here’s how to know if it’s a firm offer or just a soft quote when going to sell a private mortgage note. Read more

Owner Financing – Avoid 5 Balloon Mortgage Pitfalls

Using a balloon payment with owner financing can be a valuable addition to a mortgage note or land contract.

Unfortunately many sellers and buyers unknowingly combine a balloon payment with high risk factors turning a positive into a negative. Be sure to avoid these common pitfalls when considering seller financing with balloon mortgages. Read more

Owner Financing – 21 Insider Secrets You Must Know Before Selling a Mortgage Note

 

What if you had inside information?

What if there was someone who really knew the secrets that could make or save you thousands of dollars?

Well, there is…

The time has arrived to remove the cloak of mystery surrounding selling or brokering notes. There are simple truths surrounding owner-financed notes that should be revealed.

Too many people leave money on the table through lack of information. Worse yet, others prey on that lack of knowledge.

Whether a note seller, buyer, broker, investor, real estate agent, or cash flow consultant, we can all benefit from knowledge and straightforward answers.

What is the best way to sell an owner-financed note, mortgage, trust deed or contract?

How do you find qualified professionals and avoid the less than reputable?

What can be done to assure top dollar pricing?

These questions, and more,  are answered by drawing from our 35+ years of combined experience, sometimes gained through the school of hard knocks. We’ve been buying, selling, and brokering notes since 1988, and can substantiate, without a doubt, that we know our business.

The world of note buying can be a lucrative money making opportunity but first you must know the insider secrets we reveal here. Read more

Real Deal #149 – Seller Financing, Second Liens, and the 80-10-10.

Welcome to Real Deals!  It’s always easier to learn from real life so here we share information from actual owner financed transactions.

When the bank loan and the buyer’s down payment don’t add up to the sales price, a seller might consider owner financing the difference.  Here’s how a classic 80-10-10 worked with owner financing on a four unit residential property in Baltimore, MD. Read more

What is a Payer Estoppel?

Prior to purchasing a seller financed note, the investor might ask for a payer estoppel.  This simple one page letter or document is sent to the person making payments on the note, mortgage, deed of trust, or real estate contract.

The estoppel explains the investor is contemplating the purchase of the note, reassuring the payer that all terms and conditions will remain the same.  It then summarizes the information on the note including current balance, interest rate, terms of repayment, and contact information for the payer.

In addition to confirming information, it also provides the payer an opportunity to validate or dispute the details provided by the seller.  This can be particularly important when there is no third party outside servicing company collecting payments and keeping track of the balance.

The estoppel, also known as the vendee verification, is usually sent to the payer by certified mail or some other method of delivery confirmation.  Most investors mail once the title and property value have been reviewed and the transaction is near closing.  It might also be performed with a payer interview or verbal debt verification.

What’s Your Discount?

How do you answer a note seller when they ask, “How much will you pay for my note?” The simplest answer to “What’s Your Discount?” would be “It depends!”  But what you say next is very important.

Here’s how we like to answer the seller’s first pricing question.

“How much we pay really depends on your note. Each transaction is unique so we look to 5 key factors for pricing.  These include the type of property, down payment or equity, the buyer’s credit, how long the buyer has been paying you, and the terms of your note like interest and payment amount.

An average note will demand 80 to 95 cents on the dollar depending on these factors. If you have a few minutes we can go over the details of your deal.  This way we can provide the accurate fair market value of your note rather than just a ballpark estimate.”

We then take the time to ask them questions about their transaction to gather enough information to complete the intake form or quote request worksheet.  If possible, we also obtain a copy of the note, mortgage, and settlement statement.  We can then provide an accurate quote subject to standard due diligence.

However you decide to answer the discount question, be sure you address the seller’s real underlying question, which is “Will you treat me fairly?”

Real Deal #144 – Mixed-Use in Oklahoma

Welcome to Real Deals!  It’s always easier to learn from real life so here we share information from actual owner financed transactions.

The creation of a note does not always follow a straight path.  Often the terms are modified to fit the needs of the transaction.  This note in Oklahoma started out as a sale of business, then included real estate, and was eventually modified to meet the repayment needs of the buyer. Read more

Real Deal #143 – New York Church Note

Welcome to Real Deals!  It’s always easier to learn from real life so here we share information from actual owner financed transactions.

Think it’s hard to get a home loan?  Imagine the challenges that come with financing a church!  Here’s how seller financing offered a creative solution to provide meeting space for a New York congregation. Read more

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