Outside Closings Protect Sellers!

When an investor has performed their research and is ready to purchase a private mortgage note they will ask the seller to deliver original documents and sign the assignment package.  The investor will want these original documents before the funds are released to the seller.

A note seller will understandably wonder “How do I know I will ever receive my money once I turn over the documents establishing ownership?” 

So the investor wants the documents before the money is released and the seller wants the money before the documents are released. 

This impasse is easily solved by using an outside closing through a title company, attorney, or escrow company.  The outside closer will act as an independent third party (or fiduciary) protecting the interests of both parties. 

An outside closing is basically an exchange of money for documents. The outside closer will receive the proceeds from the investor into their trust account and also receive the documents from the seller. It is not necessary for either the investor or the seller to physically be present for the note closing with the use of overnight delivery and wire transfers. 

The fee for outside closings average $200 – $400 and can be paid by either party or split equally.  Any legitimate note investor should be willing to participate in an outside closing through a licensed and bonded closing agent. 

Outside closings offer protection and peace of mind to both note sellers and the note investors.

About Tracy Z

Tracy combines her knowledge of cash flow notes with the power of marketing online to help grow your business! She can be reached at Tracy@NoteInvestor.com 1-888-999-7905 or at Exposure One Marketing.


  1. Thomas Wright says

    Where do you find an outside closer in Maricopa Az

    • Hello Thomas,

      We usually use an escrow closer at the title company where the lender’s title insurance policy was issued.

      Also wanted to mention that if you are looking for an MLO in Arizona that is knowledgeable in seller financing and Dodd Frank you can contact Pat Billheimer at http://loanoption.org/

  2. Hi. Been looking around on the web for note information, and noteinvestor.com is one of the recommended sites I came across as being a good resource.

    Is it common for a seller to request for Proof Of Funds, such as a bank statement, line of credit, or the like? How would someone whose wanting to start brokering handle this? If I provide the POF, what would stop the seller from going to the end buyer, whether a private investor, or a established broker firm?

    Are online market places or exchanges a good place to broker notes?

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