Selling Your Note?

Often a note holder wishes to sell their note but is just unfamiliar with the process of the transaction.   Required documentation is what every note holder should have ready when they have made the decision to sell their owner financed mortgage.   In this article, we will outline all the required documentation and how it relates to taking the deal to closing and collecting that lump sum of cash in exchange for their seller financed note.  

First and foremost, is submitting a copy of the note and its amortization schedule.  This will be used to confirm all and any information that was given over the phone or in person.  It will establish credibility between the buyer and the seller in addition to showing the terms of the note and its date of maturity. Buyers will also use this document to pull credit on the payor(person living on the property who is paying the monthly bill to the note holder) to find out their  credit score which is one of the main factors in pricing the note.  If the credit score of the payor is low, this will affect the quote given to a note seller resulting in lower numbers for the client.   Some buyers will refuse to do a deal if the credit score of the payor is considered too low.  Most buyers will want the payor to have an average credit rating of 625 or better.  The amortization schedule connected to the note will show potential buyers all the required payments, due dates, along with an end date or date of maturity.

The next required document a note seller will need to submit is a copy or proof of an existing title insurance policy.  The buyers will update the policy if one already exist. If one does not exist, the buyers will purchase a new title insurance policy with the cost coming out of the proceeds to the client.  This is required since this is the only protection the buyers have in retaining the title in the event the payor ever defaulted or walked from their financial responsibilities. Proof of a home owner’s insurance policy is also required for the deal to go to closing.  This protects the buyer’s investment from things like natural disaster.  Scanned copies of most of these documents are usually acceptable to keep the deal going through processing.  

The next document buyers would want to see is a “note analysis worksheet” on the property which outlines details of the note like address, appraisal of property, interest rate, payments made, are they made on time, are there any liens on the property, etc.   In addition, a 12 month payment history of the the payor would be required.  Proof of this history is best shown by copies of cancelled checks the payor made monthly on the property which should be easily obtained from the bank the checks were deposited.  A credit check on the payor is also done to give the buyers an accurate assessment of whether the payor will keep his end of the bargain by paying consistently every month on time. Usually buyers are looking for a credit score of 625 or above but will work with credit scores as low as 500.

After all this paperwork is submitted, the buyers will send out an appraiser to insure the current value of the property.  If the appraisal checks out will the information given on the “note analysis worksheet”, the deal will now proceed to closing.  The seller of the note would be informed of a closing date and local title company they would personally go to signed closing statements, hand over any original copies of the note, and collect their payment for the note. The most common thing that slows down most note deal payoffs is the speed at which the documentation is sent in by the note holder.  If they drag their feet about sending in paperwork, it just delays the process.  Most deals are concluded in 30-45 days but with all the proper documentation sent in all at once, payoffs can be in as little as 15 days.  The key as always when getting the best price for your note is to shop around for the best broker that will get you the best price for your note.

Is The US Economy Circling The Drain?

This is a medical term used by hospital staff when a patient is beyond all hope of saving but is still alive,still clinging to the very last bit of life till it too is gone,and the patient slips quietly into death. They are no longer a part of this world and gone forever. Is this an accurate description of our economy right now in its present state of being. Has the real estate market hit bottom? How much longer can the federal reserve print money before our dollar is worth absolutely nothing? How much time do we have before our economy is severely effected by the reform of Petrodollar recycling, which would result in the ultimate collapse of the US dollar here in America and abroad. These are all questions investors want to know in today's uncertain economy.

According to The Wall Street Journal's,"Money Watch", a recent study has shown the housing market is slowly on the rise 7.5% over last year at this time. Interest rates have never been lower for financing single family housing. The only problem with this situation is that it really does not matter how low the interest rate is, if your worried about whether you will have a job from one day to the next. The result is that the average

citizen is going to hold on to what ever money they have due to a lack of consumer confidence in an uncertain economy. People worried about jobs and the future don't spend money. They also don't spend money on consumer goods which further hurts our already stressed economy. What money they do spend on housing and consumer goods is getting even smaller due to shrinking value of our American dollar which has been quoted to be worth only 4 cents per dollar,thanks to the federal reserve banking system of America.  

Every time, the federal reserve creates a need to print more money, it connects with the US Congress to make that happen. In the past,every dollar printed by the fed used to be backed by gold. This law was done away with in 1971. After that date, the federal reserve had a free reign to create money out of nothing and backed only by a promise to pay. The Fed will not account for what they do nor do they feel that they should. This is what they believe as they control the cash flow of America's private citizens. Since the Federal  Reserve is a private company, and connected to the US Congress,much information is withheld from the American public on their activities,intentions, and ownership. They are no more Federal than Federal Express. How is it that an independent company in the private sector has a hold on this country's finances without a transparent view of them by the American public and without accountability of any kind. They basically have a free reign to do what they want when they want it,which will bring this country down financially to its knees. This will not stop unless the federal reserve banking system is abolished, and our governing bodies are separated from the financial institutions of the private sector. In addition, corporations should not be allowed to contribute any monies to any political parties of any kind ever again. 

 Before the US dollar totally collapses,American citizens will only have to monitor of collapse of the "Petrodollar System,"which now is in the process of reforming negotiations with OPEC and other foreign nations. Their goal is to change the currency for buying oil from US dollars to Eros. First,one must understand the petrodollar system and how it works. For foreign countries to buy oil,they must first exchange their own currency for US dollars. That is what the US world leaders decided. Foreign countries in turn sell the US their products to get a higher rate of exchange for US dollars. All excess profits made by these countries are then recycled back into a US Federal Reserve Account. So as a result,the federal reserve is able to make major profits from the out going dollars to other countries and again when they recycle their excess profits back into private federal reserve accounts. This could also account for the secrecy of the owners of these accounts. 

 If OPEC and other foreign countries are successful in changing the currency for buying oil, the US dollar will no longer be needed. The Russian Securities Exchange recently opened direct trading between the Chinese currency,the Renminbi,and the Russian Ruble. Other smaller foreign nations are presently discussing switching to the Euro. At this point, two things will happen. The US will go to war(WWIII) to keep the oil and the mega profits they are making as a result of the petrodollar recycling process. They did it in Iraq when the Bush administration found out Saddam Hussein was in the process of changing the currency to gold for all Iraq's oil. The Bush administration put a stop to that by going to war to fight the so called war against terrorism,which was pure bullshit. They gave the same reasons for going to war with Afghanistan when they really wanted to secure the Caspian Oil Pipeline that extended through that country. 

 Every year the federal reserve must create debt in excess of the debt and interest of the previous year to keep the petrodollar system functioning. The results are clear. When debt is created, money is created. When debt is paid off, money is destroyed. There will never be enough to pay off the debt which leaves consumers stuck in a never ending rat race to keep up. So do not expect for things to get better. They will only get worse at this point and there is a reason for that. Its because the owners(1%) of this country want more for themselves and less for us (99%). So, their bottom line is their master and they do not give a dam about the American people,never have and never will. As long as the owners of this country have control of  the nation's money, they do not care who makes the laws.

Selling Your Note For Cash To Buy Gold

The USA's triple A credit rating has now been downgraded to a double A. Downgraded notes will be worth less and less as time goes on. Note holders of seller financed notes might want to think about cashing out now before things possibly get worse. There does not seem to be an end in site for years to come with financial forecasters predicting possible further losses as time goes on. People are also cashing out now while they can to buy gold which is skyrocketing in price by the day. With gold currently sold at $1724.40 an ounce, investors will continue to keep a close eye on the price of gold which is lucrative by anyone's standard.

Last weeks financial indicators witnessed one of the largest stock market fallouts since 2008. The Dow went down 634 points in one day. It was frightening for these shareholders to see such a drop in their bottom line just like that. Nas Daq lost 7% of its total value in one day with stocks plummeting. The S&P500 lost 6.6% of its total value in one day. This resulted in them downgrading the good ole USA from a triple A rating to a double A rating. In addition to that,Bank of America lost 20% of their total value in one day according to David Favor of "NBC Nightly News".


The results from this downgrade will be higher interest rates on bonds,loans for things like mortgages,credit cards,education,cars,etc. Gold is now on the upswing with prices for gold tripling in the last few years. Many people are now cashing out to buy as much gold as they can with the idea that the countries financial situation could get worse. The experts are predicting very much more of the same,that our present financial situation could potentially deteriorate even further. So it may be a good idea to get the most out your seller financed note while there is still time. Its really hard to say just how much the value of any seller financed note will go down resulting in further loses for our note holders out there with carried back paper.

So in conclusion, its safe to say that our current markets are in turmoil. Because our politicians haggled about policy way too long, we lost our triple A,S&P500 rating which resulted in the nations leading financial experts predicting that our stock market will continue to fluctuate on this never ending roller coaster. This also means higher prices for everything we buy and uncertainty in the stock market which ultimately leads to fear which always results in stocks plummeting in this downward out of control spiral. And so as a means of financial rescue, many are turning to gold as a sound investment and cashing out their seller financed notes of all kinds just to buy as much of the precious metal as they can. Who knows what the financial future of our country will be in the next few years? No one can tell for sure at this point. The only thing that is known is that the financial future our country will continue to be in a state of uncertainty.

Pricing Seller Financed Notes

In the pricing of seller financed notes there many things taken into consideration.  Some people like to just put a certain percentage on the dollar for every note priced, but there is so much more involved than that. In this discussion, I  will outline about the different factors that make up the pricing of every note whether it is a note on a single family residence, land contract, mobile home, RV park, or a business.  Buyers interested in any seller financed note will put a grade on that note which is determined by 6 different factors.  The information gathered in these 6 different areas results in a final grade for the note. Once the note is graded only then can a final price be determined for that note.

The first and most important factor in the pricing of any note is equity which is the amount money already in the property.  One can see just how important this information is to buyers, since they base 50 % of their decision on this bit of information alone.  If a large amount of equity is already in the property when the note holder decides to sell their note, they stand to get a much larger price for their note than if they just started paying on their note and did not have much into it. Thus, the more you have into the note, the more you will get out of it.

Secondly is the credit score of the payor.  The credit score of the payor is important for the following reasons.  The higher the score of payor, the higher the payout will be on the note thats up for sale.  The buyers base 20% of their decision on this information, and will pay more for a note when they have information telling them they will be getting their monthly payments,on time, and without delays. Thats what a high credit score shows the buyers and thats the kind of payor they will want to have sending them their monthly payments. Thus, a credible payor shines in the eyes of the prospective buyers.

This also leads to our next factor in pricing seller financed notes which is payment history.  Every buyer will examine the payment history of the payor on the note to determine gaps in payments, late payments, or payments that just did not get paid at all such as delinquent payments.  Another 20% of their decision comes from this information so it is important for any payor to have all their payments made on time without delays or gaps between monthly payments.  The better these numbers are, the higher the payout will be for the note up for sale.  The number of payments made accounts for 10% of their decision and fourth on our list of pricing factors. This is also called "seasoning."  If more payments have been made, more money is into the  the property,thus having more equity which is most important as previously stated.

Fifth on our list is the type of note considered for pricing. There are seller financed notes on single family residences, mobile homes, land contracts, RV parks,condos,apartments,and businesses.  So the list is wide and every note is different with different circumstances connected to it.  And finally, the sixth factor in the pricing of every note is the position of the note whether it be a first position note or a second position note. First position notes will always get a higher payout than second position notes.  This is so because the buyers who buy any second position note are also responsible for the payment of the first.  Thus, it is always best to go into a seller financed note deal selling a first position note over a second.

In conclusion,note pricing is a very detailed well thought out process that involves six different factors. Of the six factors of seller financed note pricing, equity being the most important followed by the payor's credit score.  The buyers then look at payment history followed by the number of payments made. After that, consideration of the type of note and its position are all taken into account leading to the note receiving a final grade.  Once the note is graded, it is priced and ready to be bought by its prospective buyers.  

Now Is The Time To Sell Your Seller Financed Note

Yes, now is the time to sell your seller financed note before things actually get worse. On March 9, 2011 it was reported that housing sales have gone down yet again due to low appraisals of residential housing. Foreclosures are still on the rise because of the present day financial shape of our work force,banks and lending institutions. Private lenders are upping downpayments on residential homes as a means of protection against low appraisals in neighborhoods  with lots of foreclosures for sale.

According to National Public Radio, housing sales are down 10% due to low appraisals in residential areas. If a residential neighborhood has a high rate of foreclosures in it, this one fact drives the prices of other homes, for sale in the same area, way down below the sales prices that they are presently listed for.  Once a buyer finds out this information, they are all over trying to buy a home that has been appraised at lower than the asking price.  The home owner trying to sell their home just sees this as a deal breaker and no sale is made as a result.

Private lenders are protecting themselves from this by increasing the down payment requirements on residential home purchases.  They have found a way to get more money from a bad situation, but at the same time creating a worse situation that results in no sales of residential homes in areas where lots of foreclosure properties are being sold. So, even the people trying to take advantage of market that does not include the banks or lending institutions are now encountering yet another road block in their efforts to provide funding to new prospective home owners wanting to buy these homes.

With foreclosures on the rise, the numbers will only increase in our present day economic situation.  The banks and lending institutions are so scared of lending money or granting extensions on foreclosures. No one wants to be labled after the bail out as still doing business the same as before the bailout.  They have become insensitive to the plight of their clients and are foreclosing on homes at an astonishing rate higher than ever before.  How much more exclusion can the general public take is only a question that time will answer in the coming months and years.  Future anticipation of a resolution to these issues is not in the foresable future so hold on and keep the faith that hopefully things will get better than they are now at this time.

So in conclusion, now is the time to sell your seller financed notes before things get even more complicated for private lenders to provide seller financed opportunities to new prospective home buyers trying to obtain homes in our present day economy.  Cashing in your seller financed notes may not be a bad option for getting cash now before  pricing can be affected any further.

Come All Ye Fellow Note Finders

Questions You Should Ask The Buyer of Your Note

     Today we’ll be discussing the questions you should be asking about  note buyers.  First,Will my buyer give me a fair price for my note? Absolutely, their prices are based on 6 different factors which I will discuss in detail in another video later on. Ask your buyers if they will offer a partial purchase in addition to full purchase? Inquire about closing cost to you if any. You can also ask what their time frame for getting your money. Now this a very important one and is most crucial in any transaction. Its the level of customer service your buyer can give that can make the difference in getting clients to work with verses watching the dust collect on your telephone.
     When asking about a buyer, find out what his or her level of customer service is.  Will he or she be available at all times to answer any further questions you may have. What are their hours?
You should also get a feel for your buyer’s personality to see if you’re a right fit to do business together. Most buyers are quite friendly and display excellent customer service skills to their clients. However, some are not as friendly and are somewhat aggressive in their style of handling clients.  You’ll be able to tell very quickly whether this is someone you want to do business with or someone you would like to completely stay away from.
     I hope this info was helpful in your understanding of the questions you should be asking when choosing a buyer for your note. Until next time, do have a good day.