Real Estate Notes | Tri City Wa | Pasco, Kennewick, and Richland
Selling and Buying Real Estate Notes
Sale of real estate notes raise cash quickly. A real estate note is the loan document created to finance sale of the owner’s house or investment property. It could be a mortgage note or a land contract or contract for sale whereby payments are made in cash by the buyer.
A risk involved is that while a seller won’t get the full face value for his note there could be other fees needed to be paid. Questions arise such as whether there is a 
normal discount on a note or whether the buyer is trustworthy. Some guidelines for these are:
1. There should be no upfront fees. Certainly there will be some buyers who will check on the buyer’s credit and give a note without charging any fee.
2. Some exceptions could have a fee. The property owner may have to pay for the title policy if there are problems with the title that prevent purchase. There may be an appraisal payment if the property appraises at less than the sales price.
3. It is necessary for the note buyer to give a written purchase agreement with the purchase price and contingencies. All clarifications should be made in case of any doubt.
4. The note buyer should check the credit of the property buyer upfront. Fraudulent buyers can quote one price initially and then lower it later claiming that the property buyer has bad credit balance.
5. Several note buyers should be contacted for quotes. With information provided on the type of property, sale price, payment amounts, current balance etc., there should be a response within a day or two.
6. When a quote is selected, copies of the Mortgage or Deed of Trust, the Note, the closing or Settlement Statement and the Title policy will have to be sent.
7. The property owner should ask about the processing time. Usually once the offer is agreed upon and documents sent over, a certified check or electronic transfer to the account is expected within two or three weeks.
Getting the maximum on real estate notes
Prices offered on notes vary. Those with balloon payments get a higher price while ‘seasoned’ notes sell for even more. Some note buyers like to buy new or ‘unseasoned’ notes. After six payments these notes get a much higher price.
By deferring the sale of a house to the future as higher interest rates and shorter loan periods would fetch more money. Note buyers consider second mortgage notes and other second place real estate notes differently. The latter cannot add up to much more than 70% of the property value. If there are discounts they are likely to be steep by 20% to 30% less than the current balance on the note.
Did you have comment? If so, please leave one.
Paige Martin Houston Homes
November 28, 2007 @ 1:13 PM
I think you do a great job discussing real estate notes. There's not a lot of good information available and I really appreciate your article.
Joe
December 26, 2007 @ 2:10 PM
I want to sell a second mortgage note that I am financing at 7% I.O. for $46,800 The approx home value is $234K
adolfo
January 2, 2008 @ 5:43 PM
Dear Mr.Joe Lane: I am interest in get more information about how this notes works and how can I start my own business doing this for all the testimonies that I have heard about people having a better lifestyle. I have no idea about the real estate buisiness so How can I become a proffesional in this area.
jim
January 21, 2008 @ 8:23 AM
I will be interest on buying bad loans,also depends on the condition of the property.
Michael
February 16, 2008 @ 1:15 PM
This is a pretty good article in my opinion
Larry.Hearn
March 1, 2008 @ 5:14 PM
Hello, I have a network of investors interested in real estate notes secured by land. If I may be able to help please contact me!
Daryl A. Gullickson
March 13, 2008 @ 5:24 PM
First position, non-subordinated debt, face is $2.2MM, secured by a viable, leased building in San Antonio, TX. Term is only 5 years and has a coupon of 8%. New owner is putting additional money into the site to further increase the rental revenues. Not a flip or anything nefarious, previous owner had owned it for years, but now wants to go on to other projects and would like to find a buyer for the paper.
Martha Turner Houston
March 15, 2008 @ 1:02 PM
I really like your website. I think that your seven notes here are really helpful - thanks for the information!
Julius Morrison
March 30, 2008 @ 8:31 PM
Hi all, If any of you guys have a real estate notes for sale, please feel free to vist my website at intelnoteservices for a free no obligation quote! Thank You
Lisa
June 23, 2008 @ 8:29 AM
I'm interested in helping you sell mortgage notes for your customers, I have buyers standing by to buy them, please feel free to look at my website, thanks, Lisa
David
July 4, 2008 @ 11:35 PM
Selling the note to your house sounds like a good deal. What are the draw backs? I'm a correct, when someone buys the note to your house, you make a new contract on interest rate, payment amount, and length of loan? Thank you, David
cedric richard
August 2, 2008 @ 8:41 AM
if you have any notes that you would like to get rid of please contact me at your earliest convience, and thank you for your time and attention in this matter.
nakeisha
August 4, 2008 @ 10:03 PM
HI, my name is Nakeisha Peabody and I’m a note holder seller and I have potential buyers that may be interested in your note. Let me know if I can assist you! I hope I can have the opportunity of doing business with you!!!
Jamil
September 15, 2008 @ 9:19 PM
Hi, My name is Jamil Hudson and I am interested in connecting buyers with those who would like to sell their note or perhaps a second mortgage note.
Marcos
September 16, 2008 @ 11:57 PM
We are interested in buying any notes that are for sale. Just take a look at our website. Thanks, Marcos & Annette Tenorio
Dana Hearon
November 26, 2008 @ 5:22 PM
I have a customer who wants to use a note as part of the purchase of property. Can the seller take the note and sell it at close of escrow?
Karl Moser
January 5, 2009 @ 3:12 PM
I have a New $75000.00 note at 7.5 % interested. 2 Payments have been made on time. The property is a 1996 Double wide on 1/4 Acre of Land in Conway, SC approx 18 mins to Myrtle Beach, SC. I am interested in selling all of the note.
louisljkale
January 14, 2009 @ 8:36 AM
I want to learn the note business.What is the BEST book or program out there to use.Thank You. LOUIS KALE Tucson az
Marc Faulkner
January 15, 2009 @ 6:15 AM
We specialize in mobile home notes and portfolios of mobile home notes with and with out land nation wide. For quick service from quote to funding check us out.
Tim
February 2, 2009 @ 1:33 PM
I am interested in learning the business of buying and selling real estate notes. Please advise me as to where I can get credible information on building a business?