Questions on Selling Mortgage Notes

Wondering how this whole note buying process works? Get answers to frequently asked questions including:

Why Would I Sell My Mortgage Note?

How Do Note Buyers Decide on a Value?

What Can I Do to Make My Note Worth More?

Here are straight forward answers to the most common questions on selling mortgage notes.

Why Owner Financing?

Owner financing is on the rise with more sellers agreeing to accept payments from buyers. There are many reasons people agree to take back a note, deed of trust, mortgage or contract including:

Quick sale of the property
Monthly income from the note
No hassles of bank financing (fees, delays, and strict underwriting)
More qualified buyers
Property is hard to finance

Why would I sell my mortgage note?

Circumstances change and many sellers would prefer cash today rather than small payments that trickle in each month. Here are just a few reasons people have sold their note payments for cash:

Retirement
Taxes
Investment Opportunity
Expensive Medical Care
Vacation
College Tuition
Unexpected Financial Changes
Peace of Mind – no more worrying if the buyer is going to make late payments or having to foreclose
Accounting headaches, IRS regulations, paperwork hassles and the list goes on…

What is a note appraisal?

A note appraisal reflects the current market value of your payments similar to what a real estate appraisal provides for real property. It shows what your future payments are worth in cash dollars today and is sometimes referred to as a “note analysis” or “quote”.

We recommend you have your note evaluated once a year as pricing may change based on market conditions

How do I maintain the value of my note?

Many of the items that affect the value of your note were determined at the time the property was sold. However, there are three things that you can do now to make your note more valuable:

keep good records and copies of the payments received,
obtain a copy of the property insurance policy from the buyer each year; and
verify the property taxes are paid when they come due (usually twice a year).

This will help maintain the value of your important asset and avoid any unpleasant surprises.

Can I sell all or part of my note?

We can purchase all or part of your remaining payments. Selling part of the payments allows you to receive a lump sum of cash up front, then payments when the note reverts back to you. We can even pay cash for a portion of each monthly payment.

Many people elect to sell just enough payments to meet their cash needs today and keep some of the future payments as an investment or nest egg. Always ask for an option that meets your needs.

How is the value of a note determined?

The value of a note is affected by the down payment, interest rate, payment amount, and term as well as the buyer’s credit rating and payment history. The type, condition, and value of the property also impact the value of your note.

The time value of money, which makes payments due now more valuable than payments due in 20 to 30 years, also plays a role in the evaluation process. Generally, due to inflation, money in your pocket today is worth more now than later. All of these elements will be taken into consideration in determining the current value of your note.

How will selling my note affect the payer?

The payer experiences no change in the way the payments are structured. The only change will be the address where the payments are mailed.

How do I get started?

The first step is to obtain a quote by calling us at 862-849-7567 or click on Contact. We also request copies of the documents relating to your transaction:

Note and Mortgage (Deed of Trust or Contract)
Closing statement
Buyer information
Pay history and current balance
Previous title insurance policy
Current hazard insurance policy

We will then provide you an offer subject to the standard title, appraisal, and buyer’s credit review. Once under contract, you will receive your cash as soon as all of the documentation can be obtained. This typically takes as little as 10-15 working days.

How will I be paid if I decide to sell my note?

The purchase price is paid by the buyer in guaranteed funds (cashier's check or wire transfer) upon receipt of the final transfer package and original documents.

Funds are typically wired to the title company so you may exchange your original documents for the proceeds, assuring the safe and secure transfer of your valuable asset.

Why should I work with Gracemar & Co?

We pride ourselves on:
Corporate-level due diligence and note evaluation
Access to multiple qualified buyers for competitive quotes
28+ years of Fortune 100 transaction management experience
Licensed Florida real estate professional with market expertise
Member of Note Investor Network
Completed transparency about processes and compensation
Flexibility on all note purchase structures
Confidentiality with all transactions

At Gracemar & Co. we combine institutional-level expertise with personalized service to connect note holders with the best solutions for their individual situations.