Wholesale or Retail?

There are two primary pricing models in the note business commonly referred to as wholesale and retail. These terms differentiate what party will be paying the costs and may also refer to who is handling the processing.  Read more

Multiple Quote Requests

Should you obtain multiple investor quotes when selling a note? There are two differing camps of opinion based of course on one’s perspective. Read more

Firm Offer or Soft Quote?

Wonder whether you are receiving reliable pricing when submitting a qoute request worksheet to a note investor? Here’s how to know if it’s a firm offer or just a soft quote when going to sell a note. 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 Real Estate Contract?

Sellers providing owner financing might elect to use a Real Estate Contract, Contract for Deed, or Land Contract to document the transaction rather than a Note and Mortgage or Note and Deed of Trust.  There are both advantages and disadvantages to carefully consider when choosing a Contract.

The big difference with a Real Estate Contract is that the buyer will not receive the Deed to the property until the full amount the seller financed is paid in full. The seller remains the title holder while the buyer is making payments.  A contract is like a layaway program for the Deed. Read more

Understanding Note Endorsements

Does the seller have to worry whether an investor can demand payment once they sell their owner-financed note? The answer depends on how the note was endorsed along with the terms of the Purchase Agreement. Read more

Structuring Notes for Top Dollar Pricing

 

The terms of owner financing dramatically impact the price an investor is willing to pay should the seller ever decide to sell their note, mortgage, trust deed or contract.  Use these optimum terms to structure a seller financed transaction for top dollar pricing. Read more

Wraparounds with Underlying Liens

 

When people go to sell their home, the majority will still owe money on a loan from when they bought the property.  Since few sellers own a property free and clear, what to do with this underlying lien is an important consideration with owner financing.

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Real Deal #148 – Seller Financing for IRA Investments!

Welcome to Real Deals!  It’s always easier to learn from real life so here we share information from actual owner financed transactions. It can be challenging to obtain non-recourse loans necessary to finance the purchase of real estate in an IRA, 401(k), or other type of self-directed retirement account.  Seller financing can be a viable alternative financing solution.

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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.

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