• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
NoteInvestor.com Logo with House next to words

Note Investor

How to buy, sell, broker or invest in private mortgage notes for cash flow!

Your Trusted Source For
Note Investing Information!

  • Home
  • About
  • Articles
    • Notes 101
    • Note Brokers
    • Note Buyers
    • Real Deals
    • Seller’s Corner
    • Cash Flow Business
  • Learn
    • Sell Your Mortgage Note
    • Note Broker Training
    • How To Buy Notes
    • Note Buyers Directory
    • Creating Notes With Seller Financing
    • Note Investing 101 Series Videos
    • Note Industry Conventions
  • Bookstore
  • Contact
  • Sell Your Note

It’s A Trap! Answering This Note Seller Question

April 1, 2020 by Fred Rewey 3 Comments

It starts with a very direct question from your note seller.

“Can I get full value for my note?”

Right out of the gate, you have seemingly been boxed into a corner.

It is a yes or no question, but in reality, very few note sellers will receive par pricing for their note.

But they didn’t ask for 100 cents on the dollar, did they?

They asked if they could get ‘full value’ for their note.

Note Seller Question Is A TrapIn either case, the response is most likely the same. You basically need to reply in a way that defers the question and yet has them satisfied with the answer.

My response to the note seller is something typically along the lines of…

“The fair market value of your note depends on a couple of variables. Once I have that information we can supply you some options. Do you mind if I ask you a few brief questions about your note and the property you sold?”

Now, let’s look at a couple of things I have done here.

1. “Fair Market Value”

Everyone wants to be treated fairly. This tells them right from the start, I will be sure they get a fair number.

2. “Depends on a couple of variables”

People look at the positive side. They assume their note is great…and that is ok in the beginning. But it also gives me an out when we go down the road of no equity or poor credit. If there are five variables and two are bad, I also give them the ‘win’ of three of them being good. When I go back to quote the deal, I will lead with the good.

3. “Supply you some options”

Who doesn’t like options? It also opens the door for them to respond with something like, “Oh, I’m not interested in a partial.”* This lets me know they have probably already been talking to someone else.

*Side Note: I will almost always provide a partial quote, even if they didn’t want one. I have purchased more partials from sellers that initially didn’t want a partial than those that did.

4. “Do you mind telling me about your note and property.”

This is almost impossible to say no to. People want to talk about themselves. Plus, any reasonable seller understands I want to know a little info about what they are selling me.

About one out of a hundred people are difficult out of the gate.

I am not looking for a long-term courtship of these people.

If someone is adamant about an immediate quote (without giving me any info), I have two tactics left…

Tactic One: I am selling a car.

I say something along the lines of…

Me: “Let me ask you a question [name]. I have a car for sale. How much will you pay for it?”

Seller: “Well, what kind of car is it?

Me: “Oh, I can’t give you that info.”

Seller: “How many miles are on it? What year is it?”

Me: “Can’t give you that info either.” – I laugh.

“That is the same way a note is. You know that attorneys and closing agents all have their own version of what a real estate note should look like. You want top dollar for the note…and my job is to get you that. I just need to know some key details of the note to get you the fair market value of the note. There is no obligation. I just need some basic info about what I am paying for.”

Usually, that works.

Worse case, I just go to…

Tactic Two: Ballpark.

Me: “Without any details, there is a huge range in the fair market value of the note. Could be 60 cents on the dollar, could be 100 cents on the dollar. I would just be guessing. My job is to get you the best price and an accurate number. It sounds like you have a great note…I just need some info to nail down that offer for you.”

That’s it.

Yes, it is kind of trap, but it doesn’t need to be.

One thing is sure. Your first two minutes on a phone call sets the tone of the entire negotiation.

It is not about you trying to create a position of ‘power.’ It is your job to create an environment of working together to create a win-win situation. That can be done..even when the note seller’s first question is a tough one.

Filed Under: Notes 101 Tagged With: buy real estate notes, note sellers, partial note purchase, What's Your Discount?

Reader Interactions

Comments

  1. Steve G says

    September 8, 2020 at 10:28 pm

    James, it’s important to understand who originated the Note firstly. The Buyer of the secured property is not the “originator” and so is simply required to comply with the terms as set out in the Note/Deed/Mortgage (ie: makes the required payment amount, on a particular day of (usually) every month, for a predetermined number of consecutive months – etc).

    The Note owner or “Holder” (the person or legal entity who’s name is shown as the owner of the Note) has the right to sell at any time. So Fidelity Mortgage, as the Note Holder has the legal right to sell the Note they legally own/originated.

    In the event a potential buyer wanted to make changes, THEN “all parties” must agree to have a new/amended Note drawn up and executed.

    Reply
  2. JAMES E BLANDINO says

    August 27, 2020 at 10:46 am

    Your training states:
    “The existing note and mortgage is a
    legal document and can’t be changed without both sides agreeing in writing. ”
    Not sure I understand this statement.
    Does this mean that the property buyer ( party who makes the monthly payment)
    must agree to the sale of the note?
    Fidelity Mortgage sold my home buyer note to Wells Fargo without my knowledge or consent.

    Reply
    • Admin Help says

      August 27, 2020 at 10:56 am

      The Payor does not have to agree to the sale or ‘assignment’ of a note to another party. In that none of the terms of the note change. IF someone wants to change the terms (raise the interest rate, accelerate the term, etc) THEN the payor must agree. – This prevents someone from buying a note and changing the terms.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Learn Real Estate Notes

Click the reports below to download your FREE copy of 5 Ways to Cash in on Notes AND a BONUS!
Diversified Investment Services Inc BBB Business Review

Search This Site

More to See

Investing Notes Risk

21 Tips To Read Before You Get Started Investing in Notes

Selling Mortgage Notes? Find the Right Note Buyer!

Learn Note Business

Learn the Note Business in 60 Seconds?

Cash Flow Notes Business Truth

5 Myths About the Cash Flow Notes Business

Most Read Note Buying Info

How To Buy Mortgage Notes
Creating Notes With Seller Financing
Note Broker Training
Get Direct With Note Buyers Directory
How Can I Find Cash Flow Notes?
Buying and Selling Notes For Residual Income
How Dodd Frank Mortgage Laws Apply to Seller Financing
How To Calculate Cash Flow Notes
Note Investing 101 Series Videos
Best of Notes 2024

Connect With Us

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

Footer

Places to Visit

  • Creating Notes
  • How To Buy Notes
  • Note Broker Training
  • Note Buyers Directory
  • Sell Your Note
  • Bookstore

We Are Here to Help

Photo of Fred Rewey and Tracy Z of NoteInvestor.com
Fred Rewey & Tracy Z NoteInvestor.com

Receive the Note Investor Newsletter

I confirm that I am at least 16 years of age or older

I have read and accept any EULA, Terms and Conditions, Acceptable Use Policy, and/or Data Processing Addendum which has been provided to me in connection with the software, products and/or services.

I have been fully informed and consent to the collection and use of my personal data for any purpose in connection with the software, products and/or services.

I understand that certain data, including personal data, must be collected or processed in order for you to provide any products or services I have requested or contracted for. I understand that in some cases it may be required to use cookies or similar tracking to provide those products or services..

I understand that I have the right to request access annually to any personal data you have obtained or collected regarding me. You have agreed to provide me with a record of my personal data in a readable format.

I also understand that I can revoke my consent and that I have the right to be forgotten. If I revoke my consent you will stop collecting or processing my personal data. I understand that if I revoke my consent, you may be unable to provide contracted products or services to me, and I can not hold you responsible for that.

Likewise, if I properly request to be forgotten, you will delete the data you have for me, or make it inaccessible. I also understand that if there is a dispute regarding my personal data, I can contact someone who is responsible for handling data-related concerns. If we are unable to resolve any issue, you will provide an independent service to arbitrate a resolution. If I have any questions regarding my rights or privacy, I can contact the email address provided.

Powered by KARTRA

COPYRIGHT © 2008-2025 NOTE INVESTOR | PRIVACY POLICY | CONTACT US
This website is for informational purposes. This is not an offer to sell or purchase any security. Nothing is intended as legal, financial or investment advice. Any historical data represents past performance and does not guarantee future results. NoteInvestor.com is owned by Diversified Investment Services, Inc.

form_tpl_2_img_1.png

Sign up and receive both 5 Ways To Cash In On Notes AND 21 Note Investing Tips...for FREE!!!





I confirm that I am at least 16 years of age or older

I have read and accept any EULA, Terms and Conditions, Acceptable Use Policy, and/or Data Processing Addendum which has been provided to me in connection with the software, products and/or services.

I have been fully informed and consent to the collection and use of my personal data for any purpose in connection with the software, products and/or services.

I understand that certain data, including personal data, must be collected or processed in order for you to provide any products or services I have requested or contracted for. I understand that in some cases it may be required to use cookies or similar tracking to provide those products or services..

I understand that I have the right to request access annually to any personal data you have obtained or collected regarding me. You have agreed to provide me with a record of my personal data in a readable format.

I also understand that I can revoke my consent and that I have the right to be forgotten. If I revoke my consent you will stop collecting or processing my personal data. I understand that if I revoke my consent, you may be unable to provide contracted products or services to me, and I can not hold you responsible for that.

Likewise, if I properly request to be forgotten, you will delete the data you have for me, or make it inaccessible. I also understand that if there is a dispute regarding my personal data, I can contact someone who is responsible for handling data-related concerns. If we are unable to resolve any issue, you will provide an independent service to arbitrate a resolution. If I have any questions regarding my rights or privacy, I can contact the email address provided.

Powered by KARTRA