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?”