Use Outside Closings To Sell Mortgage Notes!

Posted on December 9, 2011 by admin

Ready to sell mortgage notes?

Protect yourself with outside closings!

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 (note, recorded mortgage, etc.) and sign the transfer package.

The Note Buyer

The note buyer will want these original documents before the funds are released to the seller.

The Mortgage Note Seller

A note seller may understandably wonder,

“How do I know I will ever receive my money once I turn over the documents establishing ownership?”

The Note Buying Challenge

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

The Solution

Using an outside closing through a title company, attorney, or escrow company easily solves this impasse. 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 buyer 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 sellers and investors when selling mortgage notes.

Sell Property Fast With Owner Financing

Posted on December 9, 2011 by admin

When a property isn’t selling most real estate agents are quick to suggest a reduction to the sales price. It is common to see the tag line “Price Reduced” added to for sale signs, listings and ads.

Rather than just reducing price…

consider offering owner financing to sell a property quickly!

In today’s real estate market obtaining a mortgage can be a large stumbling block to home ownership. In the midst of this sub prime mortgage meltdown it is difficult to obtain a loan, especially for anyone with less than A+ credit and a 20% down payment.

While there are many reduced priced properties for sale few are offering a solution to the financing challenges. By offering owner financing the seller can reduce marketing time and maximize price while providing the buyer an economical alternative to bank loans.

The buyer makes a down payment and the seller accepts payments over time from the buyer. In essence the seller becomes the bank and is able to collect interest on the balance financed at the agreed upon rate.

Rather than collect payments for 20 to 30 years most sellers will prefer a balloon payment provision that requires the buyer to refinance and payoff the seller in 3 to 5 years. The seller also has the option of selling all or part of the payments to a note investor for cash now.

Back in the 1980’s the use of owner financing increased when interest rates were in the teens and borrowers had troubles qualifying based on the high monthly payments. Seller financing is now offering a similar solution to the financing challenges caused by the mortgage crisis.

Offering owner financing can be a very effective way to reduce marketing times, provided a property is priced at fair market value using comparable sales. Simply add the words “Owner Will Finance” to the advertising and watch the inquiries increase.

How to Sell Your Mortgage Note

Posted on December 7, 2011 by admin

Want freedom from collecting payments for the next 10, 20, or even 30 years?

Prefer a lump sum of cash today?

If you sold property with seller financing chances are you’ve wondered about selling the real estate note. Here’s how to sell a mortgage note, trust deed, or contract in 7 easy steps.

Step #1 Request a Quote

- Just complete a short informational worksheet to receive a free no obligation quote. This can be submitted online, by fax, or over the phone.

Step #2 Provide Document Copies

- To get started note buyers like to see copies of these three documents:

Settlement Statement
Promissory Note
Mortgage, Trust Deed, or Contract

It is also a good time to be sure you know where the originals are located, especially the Promissory Note, as they will be requested at closing.

Step #3 Accept Offer & Agreement

- Once an offer is accepted it will be outlined in a written agreement. In addition to stating the price, the agreement will specify conditions of closing and who pays costs.

Step #4 Note Buyer Review

- The mortgage note buyer will perform a detailed review of the transaction, known as due diligence. This includes a review of the buyer’s credit, current tax and insurance status, payer interview, and other important items. They may also request copies of additional documents including a payment history, insurance policy, and existing title report.

Step #5 Appraisal

- The note investor will order an evaluation of the current property value. This usually takes the form of a Broker’s Price Opinion (BPO) or Drive-by Appraisal. The investor wants to be sure the property value is still equal to or greater than the sales price. If the value comes in low, the note investor may present a revised offer for consideration.

Step #6 Title Search

- The title search verifies ownership of the property and the mortgage note. It saves time and money to work with any title report that might exist from the original sale date. If the title search shows money is still owed on a prior mortgage it will usually be paid from proceeds.

Step #7 Closing

- When all steps are complete the note buyer will send the final closing documents for signature. The title company is often used to handle the exchange of money for the original note and transfer documents. Funds are typically paid in the form of a wire transfer or cashier’s check. You are also encouraged to have your attorney review and advise with the closing process.

We are Here to Help!

Selling your mortgage note can be a simple process when you work with an experienced note buyer. Just take a few minutes upfront to gather your information and documents and we will handle the rest for you!

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