We all have had a note cross our desks that doesn’t fit our investing goals. Whether the balance is too big or too small, it’s not the type of property or occupancy we look for; it’s in a state you don’t buy notes, or it just doesn’t fit your investment parameters – that’s when you remove the buyer hat and put on the broker hat.
But, before you just forward the email to your note buyer of choice, it helps to put a little thought into it.
As a note broker, you want to ensure you’re helping the process go as smoothly as possible — and getting the best quote possible to your note seller quickly.
What Info Do You Need to Get a Note Quote?
Brokering notes is a Goldilocks situation regarding what information you send for a quote. You want the amount to be *just* right. Enough to get an accurate, aggressive offer. Not so much that you overwhelm someone and make them read an essay.
So, what should you be sending over when getting quotes?
Note Terms
Send all of the Note Terms! This includes things like:
- Sales Price
- Down Payment
- Original Balance
- Sales Date
- Note Positions
- Note Length/Term
- Number of Payments Made and Left
- Interest Rate
- Monthly Payment Amount
- Date of Next Payment
- Current Balance
But that’s not all! When sending that information, use an organized list or worksheet. Don’t just send a paragraph of numbers — do you know how hard that is to keep straight?! Make it neat, make it organized — make it easy!
And make sure the numbers make sense! Before sending something off to obtain a note quote, check if the interest rate and monthly payment with the original balance give you the correct term. Make sure the current balance is correct and is on track.
Check the note terms, organize the note terms, and then send the note terms.
Notes Your Buyer Wants
Remember how you didn’t want to purchase this note? Your go-to buyer may not want to either.
When brokering, relationships are essential. Take time to keep a list of notes your buyer has turned down in the past and why. Perhaps they have a minimum balance requirement. Maybe it’s good property condition. Or they prefer owner-occupied properties.
Don’t just spam all the buyers on your list with notes. Take the time to make sure you’re sending notes they will quote. It will help you down the road when they know that you try not to waste their time — keeping you at the top of their list when they see you in their inbox.
Property Information and Images
Set your timer for 10 minutes. Now get to Googling!
Take a little extra time to look up the property on listing sites like Zillow.com, Realtor.com, or Homes.com. What do they have for property history? What images do they have of the property?
Now check out Google Images. Is there an updated photo there? What does the area look like? If it’s a rural property, what big city is it closest to it? Save an image of the property to send with the quote.
Now go to the county website and search the address in their property database. Check the name of the currently listed owner. Check if taxes are presently paid. Check if they recorded the sale. Export that information as a PDF and send it with your quote.
The Documents
Now, not every note seller will want to send a copy of their documents before getting a preliminary quote. And we get it! While we know there is zero harm in sending the documents, it’s intimidating and scary for many sellers.
And while it never hurts to ask or mention that it allows you to get a more accurate quote — you do have to respect it.
But that doesn’t mean you send in the terms and be done…
Back to Google, we go! Revisit the county website. Sometimes, it has a link to the recorded documents in the property profile area, saving you a step. If they aren’t there, search the County Recorder’s website for their online archives.
Not all states or counties have the recorded documents online. So, you may have to send it in without documents, but it’s always nice to check. And that’s because, with a copy of the signed documents, some buyers can do a soft review of credit, which impacts their pricing (both good and bad).
And don’t we all love an accurate first quote without back and forth?
What Not to Send When Brokering Notes
An essay.
Note buyers are busy people. And it’s likely your note isn’t the only one they are looking at. While some background history is helpful, they don’t need the entire life story. They don’t need three pages of information about the property and area.
This a quote request, not a novel.
However, this doesn’t mean leave out information or sugarcoat the deal.
Be brief, be concise, be honest, and be thorough.
Note Brokering for Success
We love getting a piece of the pie by earning a referral fee without having to buy every note with our own money! Note brokering is a great way to find opportunities in notes, whether you’re a seasoned buyer or just getting started. With longevity on your mind, it’s essential to establish good relationships with some of the big note buyers by sending them just the right amount of information when quoting.
This is very helpful!