Are you tired of receiving and keeping track of monthly payments?
Do you ever wish for a lump sum of cash today?
If you sold property with seller financing, chances are you’ve wondered about selling your real estate note. Here’s how to sell a mortgage note, trust deed, or contract in 7 easy steps.
Step #1 – Request Quote
Just complete a short informational worksheet to receive a free no obligation quote. This can be submitted online, by fax, or in a discussion over the phone.
Step #2 – Provide Copies of the Documents
To get started, note buyers like to see copies of these three documents:
Settlement Statement from when the property was sold
Promissory Note between the seller and the buyer
Mortgage, Trust Deed, or other legal Contract
Now is also a good time to be sure you know where the originals are located, especially the Promissory Note, as they will be needed at closing when you sell the note.
Step #3 – Accept Offer & Agreement
Once an offer to you 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 various costs.
Step #4 – Note Buyer Review
The buyer of the mortgage note will perform a detailed review of the transaction, known as due diligence. This includes a review of the buyer’s/borrower’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 value of the property. This usually takes the form of a 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. In some cases however, the note buyer will take responsibility to pay the prior mortgage note and that arrangement will be included in the agreement for the note.
Step #7 – Closing
When all steps are complete the note buyer will send the final closing documents for signature. A title company is often used to handle the exchange of money for the original note and to 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 you with the closing process.
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 they will handle the rest for you!