The annual statistics for owner financing are hot off the press providing an overview of 2012 and insights on note buying in 2013.
“2012 saw a 15% increase in the total number of seller financed transactions, the greatest number of notes created in any year since 2006,” reported Scott Arpan, President of Advanced Seller Data Services.
The analysis was based on 1702 counties reporting across the U.S. for a count of 103,313. Click here to download the full report in PDF format.
Seller Financing By State – Texas Wins Again
When thinking of marketing, it’s always interesting to see what states have a higher percentage of owner financed notes. Here’s how the top 10 stacked up this year:
So ten states contributed to 65% of the volume while residential properties (SFR, 1-4 plex, Condos, and Mobile Homes) made up 69% of the seller financed market with an average note size of $134,380. Other property types like apartments, commercial properties, and tracks of land had considerably higher averages as reflected in the report detail.
Seller Cary Back Projections
Here are a few projections as shared by Scott Arpan at notesellerlist.com:
“In the past three years the creation of seller carried notes by individuals who create one note grew 85%. I anticipate continued 10% to 15% growth of notes created by individual sellers holding one note.
Creditors will continue to make access to credit difficult to impossible for half of the potential buyers in the US. However, a lack of seller’s equity in most markets will keep a ceiling on the number of properties available for seller financing until property values appreciate.
The new Regulation Z rules may curtail some note creation by builders and rehabbers. I expect many may create one note per entity to comply with the rules.
According to many of my customers, response rates and the interest of note holders to liquidate their note has increased fairly sharply since the election last November. January through April should see higher than average response rates as note sellers need cash to consolidate debt, pay taxes bills or invest in the resurgent stock and real estate markets.”
So what are your projections for the coming year? Will this impact your marketing plan for the note business? Please share your comments below!