New alternatives to foreclosure unveiled
Government offers Home Affordable Modification Program
Homeowners who can't afford their mortgage payments may want to take a look at the federal government's new alternative to foreclosure: the Home Affordable Foreclosure Alternative program, or HAFA, which intended to encourage lenders to facilitate short sales and deeds-in-lieu, or DIL, as alternatives to foreclosure.
The program, which is a part of the Home Affordable Modification Program, or HAMP, may help some homeowners escape a bad situation, but the rules are complicated and they won't be able to keep their homes.
U.S. Treasury Assistant Secretary Herbert Allison explained the concept in congressional testimony.
"HAMP does not, nor was it ever intended to, address every delinquent loan," he said. "In these instances, the borrower may benefit from an alternative that helps the borrower transition to more affordable housing and avoid the substantial costs of foreclosure."
Here are some details from the government's 43-page directive for loan servicers:
A short sale allows the homeowner to sell the home and use the proceeds to satisfy the first mortgage even if the sale price is less than the loan balance.
A DIL allows the homeowner to voluntarily give up the home to satisfy the first mortgage even if the home is worth less than the loan balance.
The homeowner can get pre-approval for a short sale at a specific minimum price or net proceeds before the home is put on the market.
The homeowner can receive $1,500 for relocation expenses at closing. This sum may be reported to the Internal Revenue Service as income.
The home must be the homeowners principal residence.
The mortgage must be delinquent, or default must be reasonably foreseeable.
The unpaid loan balance must be less than $729,750 for a single house or condominium. Higher limits are allowed for two- to four-unit residential properties.
The homeowners monthly mortgage payment must be more than 31 percent of his or her gross income.
The homeowner must transfer clear title. The lender will allow up to three percent of each second loan or lien, up to $3,000 in total, to help the homeowner satisfy these obligations.
The government's directive excludes loans that are owned or guaranteed by Fannie Mae or Freddie Mac. However, the two government-run mortgage corporations are expected to release their own guidelines.
Homeowners can use the Loan Look Up Tool on the Making Home Affordable Web site to find out whether they have a Fannie Mae or Freddie Mac loan.
The lender cannot require a cash contribution or promissory note, cannot pursue a deficiency judgment and must release the homeowner from all future liability for the debt.
The loan servicer can use the financial information and hardship letter that the homeowner submitted for a loan modification, or request updated information to evaluate the homeowners eligibility.
The loan servicer must assess the current value of the home. If the short sale or DIL isn't completed, the servicer can add the cost of this assessment (e.g., an appraisal) to the loan balance.
The homeowner must sign a Short Sale Agreement or DIL Agreement on or before Dec. 31, 2012.
The home must be listed for sale with a licensed local-area real estate professional. (This requirement doesn't apply to DIL.)
The homeowner must cooperate with the real estate professionals efforts to sell the home and maintain the interior and exterior of the home.
The servicer and homeowner must meet a number of time frames.
The lender may require the homeowner to make full or partial payments on the mortgage, up to 31 percent of the homeowners income, subject to the lender's written policies.
The homeowner cannot have a close business or personal relationship with the real estate agent or buyer and cannot have an expectation of buying back or renting the home after the short sale or DIL closes.
The lender can initiate or continue, but not complete a foreclosure sale while the homeowner is involved in the program.
Homeowners should discuss the income tax consequences of debt forgiveness with a qualified tax professional.
The servicer will report the short sale or DIL to the credit bureaus. That will hurt the homeowners credit score, although not as severely as a foreclosure.
The buyer in a short sale can't resell the home within 90 days of the purchase.
The program launched April 5 and is scheduled to sunset on Dec. 31, 2012. Servicers may elect to implement the program sooner than the official effective date.
Homeowners are encouraged to contact their loan servicers to find out whether they are eligible for the program or call the HOPE hot line at (888) 995-4673 to speak to a government-certified mortgage counselor. More than 100 servicers have signed up for the program.
These servicers are required to participate and write their own policies subject to investor guidelines.
Going up
Mortgage rates jumped for the second straight week.
The average 30-year fixed-rate mortgage rose 12 basis points, to 5.35 percent. A basis point is one-hundredth of a percentage point. Rates have risen 24 basis points in two weeks and are now at their highest point since Nov. 4, 2009.
Meanwhile, this week's average 15-year fixed-rate — a popular option for refinancing — leapt 16 basis points, to 4.69 percent.
The average jumbo 30-year fixed rose 6 basis points, to 5.98 percent.
Adjustable-rate mortgages split this week. The one-year adjustable-rate mortgage remained unchanged, at 4.74 percent. Meanwhile, the popular 5/1 ARM rose 4 basis points, to 4.55 percent.
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Showing posts with label liquidation. Show all posts
Showing posts with label liquidation. Show all posts
Monday, April 19, 2010
Wednesday, December 3, 2008
How to make sure you get the highest price for your mortgage note.
How to make sure you get the highest price for your mortgage note.
- Buyer's credit.
The better the credit rating of the buyers, the more valuable your note.- If they are a husband and wife, find out the credit rating of both of them. many time the wife is earning more than the husband.
- If you don't have a credit report, you can order a free report from us.
- Sale price of real estate.
If this is MORE than the actual value of the real estate expect to take a bigger discount when you sell the note. An experienced note buyer wants to have some equity in the property in case the buyer defaults. - Third party buyer.
If you sell to a family member or friend you WILL have difficulty collecting your payments. - Actual, provable value of the real estate.
If you are taking back a first mortgage note there is no legal reason to have an appraisal. But if you intend to SELL the note, any experienced note buyer will want to know what the property is worth. It may be harder to access the property and have an appraisal done after you close on the sale. - Loan to Value ratio. LTV.
For a note to be marketable the total LTV, that is including the first and second mortgage (if any) should be no more than 75% of the actual value of the property. However, if the buyer's credit is good, this 75% could refer to the Investment to Value or ITV. In other words, the amount the note buyer is investing in the note. Thus if the property is worth $100,000 and the buyer has put down a 10% payment and has a $90,000 mortgage, you could get $75,000 (75% of the value) for your note. - Who are the buyers?
If the buyers are husband and wife they BOTH need to sign the note. If the buyer is a corporation, trust or LLC then make sure the principals also PERSONALLY sign the note. If they refuse to do so this could be an indication they will let the note default if the deal doesn't work out for them. Of of, this need not apply if the buyer is a substantial corporation. (I wouldn't ask Bill Gates to personally sign on a note from Microsoft. :-) But how about a note from WorldCom or Enron?) If the borrower is NOT a substantial corporation then the note could be either unsaleable or only saleable at a much larger discount to reflect the lack of personal liability. - Seasoning, aging.
There is no doubt that a seasoned note, where the buyers have made payments for a year or more, is easier to sell and will get a higher price than a new one. But of course you won't have this option if you want to do a simultaneous closing. - Institutional lender allows secondary financing.
There are many institutional lenders, banks etc. that will not allow secondary financing behind their note. Why not? After all, their lien is senior anyway. One answer is simply that they do not want to the borrower to be stretched to make their payments. Also they would sooner the buyer put down more cash or pay for mortgage insurance (a fancy way of saying a higher interest rate.) - Loan properly secured.
If your mortgage is a second mortgage, it should be a properly recorded mortgage or deed of trust to comply with your local laws. Any documentary and intangible taxes should be paid. Without this the mortgage may be unenforceable. - Title insurance.
You should have proper mortgagee's title insurance. - Rights with respect to first mortgage, if you hold a second.
If you are holding a second mortgage it should contain language to the effect that a default on the first mortgage is a default on the second. Also that you, as second mortgage holder have the right to check on the payment status of the first. - Interest rate.
Other things being equal, the higher the interest rate, the higher the price you will receive. But be aware of laws concerning Usury and Predatory lending. A below market interest rate will demand a hefty discount to be saleable. - Length of note to short.
Typically it is hard to sell a note with a short balloon, or a balloon due in just 6-12 months. The note buyer will be concerned that the borrower won't be able to refinance and pay them off.
But a loan with for example, 3-5 years to run, and a 30-year amortization is going to be saleable, other things being equal. - Length of note too long.
The note buyer won't usually want to wait 30 years to get paid off, but these notes can often be sold to institutional note buyers.
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Tuesday, November 25, 2008
Mortgage Note Buyers Helping You Get The Most Money For Selling Your Mortgage Note
All mortgage note holders want to know more about selling their mortgage note. Don't you?
Well, the popular way to get a lump sum of cash for your future payments is by using a mortgage note buyer.
Most people don't realize they have different creative options when using a contract buyer that can keep them from getting the most money for their owner-financed mortgage note.
It may seem scary or challenging, but truly it is not, unless you do not know the answer to this question.
Can I receive cash now and still hold part of the note? In other words, do I have to sell all of my note at once?
At first glance, this may seem obvious that this is the best choice because it will get you the most money up front. For some people, it is. When it comes down to it, it is up to you and your needs. If you need or want a large all cash payment and want to be out of the deal, rid of headaches and worries of a default buyer, avoid destruction of property, taxes and insurance, and would like a larger sum of money now instead of collecting small monthly checks, then a full sale is best.
But let 's take a look at some more needs. If you are just looking to get a
larger down or some money to take care of some immediate needs or
pleasures, then a partial payment may be better. Maybe you just want to
lessen the amount of strain or burden of carrying the note and would like to sell just a portion of each monthly payment. Then a split payment option will be better for you. (This way you can go on vacation, consolidate debt buy a new car...)
What is a partial? A partial is the purchase of a portion of an income streams remaining payments, or a purchase of a portion of a specific payment, or any combination thereof.
There are many times when this may make sense. Let 's say that you have a new note and it has not been seasoned (length of time that a note has been in place and paid on), it has little or no down payment, and has poor credit by the payer. In this case, it would be better to sell only part of the future payments. It will get you more money in the long run because the mortgage note buyer would have less risk should the buyer default on the note. Then after the note has experienced seasoning you could sale the rest of the payments at a much higher percentage.
Let 's look at an example of this:
Sales price: $100,000
Down payment: $5,000
Original note balance: $95,000
Payers credit: poor
Seasoning: 1 month
Appraised property value: $100,000
Term: 360 months
Interest: 10%
Remaining payments: 359
This is a low quality note because the buyer is not putting much money down,
the pay back period is very long, and the buyer 's credit is bad. But you could still make out like a bandit by selling it as a partial. Let 's say you sold the first 120 payments (10 years) for $51,000. After the 120th payment, the contract would be returned back to you. The balance owed to you would be $86,391.12. You would then start to collect the payments from then on. Let 's see how this looks.
Sales price: $100,000
Down payment: $5,000
Original note balance: $95,000
Contract written for 30 years @ 10%
Monthly payment: $833.69
Note buyer purchases first 120 payments for: $51,000
Total cash to home seller $56,000
(down payment + cash from note buyer)
After 120 payments contract is returned to you with a balance of $86,391.12
Total money to you: $142,391.12 (including interest). Not shabby for a house that sold for $100,000.
So, what is a Split?
A split is a purchase of a specified monthly amount. If you're getting to the point where you would like to enjoy some of the finer things in life, while still receiving a good monthly income, then a split payment is a great choice for you.
For example, if the monthly payment on a seller-financed note is $1,000, we could purchase $200, $500, $750, etc. of the monthly payment. This will allow you to get cash now and then still collect a monthly income from the note.
All in all, each situation is different and may need to be tailored differently to meet your needs. I can't say exactly what you will get for your individual situation, but I can say that you should walk away happy. Selling your mortgage note should be much easier and more profitable now that you are armed with some creative options.
Get a free quote email us at quote@smilingdogenterprises.com
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Wednesday, November 12, 2008
Most Often Asked Questions About Selling A Mortgage Note
Mortgage note buyers exist to help you create, sell and understand your mortgage notes, contracts for deeds, trust deeds, and promissory note both residential and commercial.
Below you will find 5 frequently asked question about selling your mortgage note.
5 frequently asked questions, that most note sellers have about selling their owner-financed mortgage note are:
1. How much cash can I get? There are many factors in determining the offer price for selling a mortgage note The main four are equity, seasoning, interest rate, and credit of payer.
The more of these you have in your favor the larger lump sum you will get. This is why many mortgage note buyers offer a free no obligation quote.
If you look through some of the questions there, you'll see that they are simple and only take a few minutes to fill out.
These type of questionnaires are designed to keep you from having to dream about how much money you will get. The coolest part about it is, if nothing else, you know how much money you could receive if you wanted it.
2. How do I sell my note? Selling your note is easy. The first step is finding and contacting a mortgage note buyer or contract buyer and simply telling them that you want to sell your note.
This initial contact could be by phone, email, or through filling out a free mortgage note quote form. More than likely, if you are reading this, then you are at a site that can help you get a cash offer for your note.
If not, then there is a link to a good website and company above, that can give you a "No hassle, No obligation" quote.
Once you give the contract buyer some required information, they will be able to get back to you, usually within 24-48 hours, with an offer.
3. How long does the process take once I decide to move forward? After you have given the mortgage note buyer the required information, either by calling, email, or filling out an online form, they will get back to you in 24-48 hours.
Usually, it only takes 2-3 weeks to complete the deal and have a huge certified check deposited, or wired to your bank account.
4. When I convert my note to cash, how will it affect the person(s) paying me? Not at all. The terms, payment, and amount owed stay the same.
This is a really neat thing about selling your mortgage note. You can get a large sum of cash and it doesn't affect the person(s) paying you. Sounds like a "win-win-win" situation to me.
5. Where would the closing take place? Usually, at the closest title company near you. Sometimes it takes place in the town or city in which the property is located...which brings up another question.
Do you have to be there for the close? Nope, not generally. The person handling the title and closing the deal can send you the closing package. This is all done to make it as convenient and as easy for you as possible.
As you can see, getting a large sum of cash now for your future mortgage payment is an easy process that can put a lot of money into your pocket for a vacation, to consolidate bills, and buy or enjoy any other necessities or pleasures.
Mortgage Note Questions - How To Sell Your Mortgage Note
When it comes to selling real estate, one of the biggest obstacles sellers face is a so-called “depressed” market. Even when a property is highly desirable, it can be hard to get the price you want in this real estate environment. You could end up losing a lot of time, money, and opportunities, waiting for a “perfect buyer” who may NEVER materialize!
The traditional solution is to drop your asking price. But this common strategy doesn’t always work in your favor. In fact, it can work against you, making your home seem undesirable and your position seem weak.
But there IS a way to turn this challenge into a profitable opportunity! I am not selling anything. I am in the business of paying cash for mortgage notes and trust deeds.
Keep in mind that it has to make financial sense. Although having regular income is a nice idea, there comes a time when you might need a lump sum of cash for an investment, a large purchase or just to pay.
A cash flow notes statement documents the amount of incoming and outgoing cash and its equivalents. Only cash sales are recorded in a cash flow statement – all future sales including those made on credit are not declared.
Most banks refuse to accept a short sale or modify the terms of a mortgage unless the owners are numerous months behind in payments. The homeowners come to the bank to ask for help to avoid foreclosure. Individuals sell structured settlements to get liquid cash. They can be sold to special financial institutions. The main advantage of selling structured settlements.
In situations where you are holding the sell mortgage notes and receiving payments from the sale of commercial and residential real estate, and you are want to cash in on those payments, there are service agents who provide help. This technique has been the key in making up an estimated 20% of all private note sales.
Right now, thousands of people across North America are stuck with investments that they don’t want. They would rather have the cash now! Whether it’s a real estate note created when selling a property, a business note created when selling a business or even a structured settlement, there are thousands of notes out there that could be turned into cash!
Get cash now and forget those monthly payments FOREVER! We work with buyers who are ready to pay top dollar for your notes. If you have a trust deed, a mortgage note or any private loan, it's time to find out exactly how much CASH you could be entitled to.
* It's Quick: Learn how to cash out in minutes
* It's Easy: You could have cash in just days
* It's Secure: Get real quotes directly from certified buyers
There has never been an easier or faster way to cash out of your investment. Whether you need money to pay bills... to buy a home... to fund an education... or even if you just need some spending cash... We'll show you the money for your mortgage note or trust deed!
http://www.smilingdogenterprises.com
getcashnow@smilingdogenterprises.com
Thursday, November 6, 2008
Financial Planning How To Sell Your Mortgage Note For Cash Now
Many people that sell their home or property choose to sell it themselves as opposed to going through a real estate agency, bank or lending institution. There are different reasons why they may choose to do this. They may be selling it to a friend or relative and want to avoid or eliminate the middle man or the buyer may not be able to obtain conventional bank funding. Another reason may be to avoid having to pay commission to a real estate agent for selling your property. If you’re selling your property for a large sum of money, the commission the real estate agency will earn can be quite substantial. When you are the seller that holds the trust deed on the property sold, things can go smoothly or problems may arise.
If you are not in instant need of the proceeds from the sale, being the “lender” may work out great for you. Many people, however, discover after a certain amount of time that they want to invest in property and need the money. If this is the case, the first question you may ask yourself is, “How do I sell my trust deed?” This is actually something you should consider at the time you sell your property. You may think that acting as a lender will be simple and quick for you and the buyer, but you may want to learn all you can about this procedure before you make a commitment.
If the buyer is having difficulties making the payments, you may tire quickly of being the “bad guy” demanding payments or collecting late fines. If I was considering selling and holding the trust deed for my property, I would research how to sell my trust deed before I signed any legal binding contract. Even though I may not ever need to sell my trust deed, I’d still want to get all the information I needed ahead of time. We can help you learn the best way to sell my trust deed at NO cost to you. An attorney can also give me information if I want to sell my trust deed and what steps need to be taken.
We will not only buy your trust deed, but often we will buy just part of it. You may want to go on a vacation, make an investment or just have extra cash available and not want to sell the entire trust deed.
Click here to email us Our complete BLOG List a Note on our site
Saturday, August 9, 2008
Sell Your Property FAST - for the PRICE YOU WANT!
Creative Financing Journal
How to Sell Your House Fast - At The Price You Want!
The Inside Secrets To Seller Financing
When it comes to selling real estate, one of the biggest obstacles sellers face is a so-called “depressed” market. Even when a property is highly desirable, it can be hard to get the price you want in this real estate environment. You could end up losing a lot of time, money, and opportunities, waiting for a “perfect buyer” who may NEVER materialize!
The traditional solution is to drop your asking price. But this common strategy doesn’t always work in your favor. In fact, it can work against you, making your home seem undesirable and your position seem weak.
But there IS a way to turn this challenge into a profitable opportunity!
The seller finance solution
More and more home sellers are turning to private financing to sell properties quickly and at the best possible price. Why? Because it’s a great way to attract an untapped group of potential buyers looking to buy a home outside of conventional financing.
Seller financing can put you back in the driver’s seat and turn ANY market into a SELLER’S DREAM!
You see, there is a large percentage of first-time home buyers who cannot get approved for bank funding because of their credit situation. These buyers will often offer to pay even MORE than the asking price for the opportunity to live the American dream of home ownership.
Once you understand a few secrets to seller financing, you’ll know why these “credit challenged” folks can be your “perfect buyers” and provide a positive solution for ALL parties involved…
Seller financing: a powerful tool to sell homes in a stagnant market
Private financing can lead to many more home buyers
Seller financing could help sellers get more money for their property
Sellers could still receive the cash they need when financing the sale of their property
How to Sell Your House Fast - At The Price You Want!
1. Seller financing can enable YOU to sell your home quickly and easily, at the price you want.
2. It gives the BUYER a chance to purchase a home that would otherwise be out of reach.
3. If a real estate agent is involved, it allows the agent to collect a commission from a sale that wouldn’t happen through traditional means.
So everyone wins!
Turning the sale into cash
But what happens if the buyer does not put down a substantial down payment and the seller needs additional cash to purchase another property? That’s where the beauty of seller financing comes in. It’s possible for the seller – now the mortgage holder – to turn around and sell the mortgage note for a lump sum of cash!
It’s easier and more common than most people ever imagine!
As a professional Note Finder, I specialize in helping holders of mortgage notes get immediate cash for their paper asset. In fact, if you or someone you know holds a mortgage note, I can help turn it into CASH right now!
“Seller financing is a powerful tool to remedy real estate situations that otherwise look grim.”
Liquidating your seller-financed notes
How a Note Finder Helps It All Happen For You!
There is a growing group of note business professionals known as “Note Finders” who are making it easier than ever to sell real estate notes. These folks are individuals who help Note Sellers find a buyer. Also known as cash flow specialists or note liquidators, Note Finders collect and organize information about potential note sales so that people who buy notes can easily determine if the stream of income is right for them.
Note Finders serve to inform Note Holders of their options. They also help to streamline the process of selling a cash flow by helping Note Holders to understand the process.
Note Finders know what types of note terms, interest rates, down payments, and payment schedules Note Buyers prefer, and are familiar with typical yield notes. Therefore, an experienced finder can give home owners pertinent information to structure a new note so that it sells quickly.
As a Note Finder, I have an in-depth understanding of the private note industry and I am able to approximate the value of most secured cash flows.
Keep in mind that Note Finders do not act on the behalf of either the Note Holder or the buyer and do not provide counsel to either party; we represent ourselves.
I can give you an idea of what makes a note attractive to buyers as well as present information about a note to potential buyers, but will not assist either party with the decision to finalize a note deal.
Seller Financing: Creating A Note For Quick Sale
Seller financing is a popular way to sell real estate without dropping the price. In fact, builders will often offer financing to sell the properties they’ve built in a difficult market without having to reduce their prices. When the property owner is willing to “carry back” a note many advantages can result:
1. The Seller can get a higher selling price.
2. The property can sell faster.
3. The overall sales closing ratio can increase.
4. The note can generate a steady payment stream for long-term income.
But in order to sell a house this way, the home owner needs to market the property to a different type of buyer.
Attracting “credit challenged” buyers requires a different strategy to reach a different demographic. The seller must use a more targeted marketing technique, designed specifically for the “unconventional buyer’s market.” And the most effective advertising methods to tap into this distinctly separate pool of buyers might surprise you!
Seller Financing: Creating A Note For Quick Sale
How much is a note worth?
When deciding to liquidate a seller-financed note the first step is uncovering how much the note is worth. To do that, it’s best to get inside the head of the Note Buyer.
Note Buyers always want a good deal, so most of them will usually begin by conducting a quantitative evaluation of the numbers on a cash flow. The two factors that buyers look at first are the note term and interest rate.
How term affects note pricing
To illustrate, consider these two similar notes with different terms. Assume that both notes have a balance of $100,000, with a fixed interest rate of 8 percent.
The first note has payments of $733.76 per month over 30 years (360 months), while the second note will be paid off in 10 years (120 months) at $1,213.28 monthly – a term three times shorter. For this example, assume that the buyer is looking to yield 15 percent on the remaining payments.
If no payments had been made towards the $100,000 balance, the buyer’s offer at 15 percent would be $58,030.25 for the 30-year note and $75,202.55 for the 10-year note. Based on the figures alone, you can see that the second note with the shorter term will receive a much higher offer.
An “interesting” consideration
The interest rate is also a important point for buyers when they start their note evaluation process. Specifically, buyers look for interest rates that are “just right” – neither too high nor too low. Interest rates that are too high will make it difficult for the Payor to meet her monthly payment obligations, making a foreclosure likely.
Conversely, when the interest rate is too low, many buyers find that the amount they can pay for the note typically won’t meet the seller’s needs. As a result, many buyers will avoid making offers on notes with extremely low interest rates because past history has shown that these deals can be difficult to close.
Yield vs. Interest = Discount
Here is the critical point: the amount of the discounted offer that a seller gets from a prospective buyer is usually a direct result of the difference between the interest rate and the buyer’s yield. A note with a lower interest rate forces the buyer to make up his yield from the discount instead of the interest that accrues each month. So, as the difference between the note’s interest rate and the buyer’s desired yield grows the offer to the seller decreases.
This effect can be illustrated using two notes, both written for $100,000 and amortized over 30 years. The first has an interest rate of 3 percent and payments of $421.60. The second note is amortized at an interest rate of 10 percent with monthly payments of $877.57.
If the buyer wants to yield 15 percent on the remaining payments (with no payments made yet), the offer for the first note would only be $33,342.72 on the 3 percent note, but $69,403.63 for the 10 percent note. Remember that the balance on each note was $100,000, so the discount is $66,657.28 and $30,596.64 respectively… simply because of the difference in interest rate.
Any experienced buyer who runs these figures will realize that almost all Note Holders would find a discount of $66,000 or more on their $100,000 note very difficult to swallow. A few buyers might consider lowering their personal yield requirements in an attempt to reduce the discount – if the note has other compelling attributes.
I look forward to talk with you further about any of the strategies explained here. Please contact me if you’d like to discuss this information or for help with any of your note transactions.
Seller Financing: Creating A Note For Quick Sale
Greetings,
My name is Sydney Griecci. As a professional note finder, I specialize in developing creative cash solutions; namely, I help note holders receive a lump sum of money in exchange for their secured real estate notes. I can also show home owners how to sell their property with seller finance.
Once a real estate note is created, it can be sold for cash shortly after the close of escrow. Existing notes can also be sold to achieve cash liquidity.
Additionally, if you are looking to purchase a paper asset for your own portfolio, I have the resources to show you many viable opportunities.
If you are an attorney, CPA, real estate agent, mortgage broker, title agent or escrow officer, I can assist you in helping your clients realize quick sales of hard-to-sell properties through the use of private financing.
If you would like to learn more about the creation and/or sale of secured private notes, please contact me directly.
Join my mailing list or subscribe to this publication by leaving me your contact information.
Using unconventional marketing to attract the “credit challenged” buyer
The seller’s best strategy for finding credit-challenged buyers is to advertise the property in media that is read or seen by individuals who do not have a real estate agent.
The “For Sale By Owner” section in the local newspaper is the best place to start, because that’s where the majority of home buyers go when looking for seller financing. Even in today’s Internet-dominated business world, newspaper advertising continues to be the best way to reach those looking for seller-financed deals.
All it takes is a simple sale ad including the line “seller financing available,” “credit issues OK” or “little or NO down payment needed” and you should catch the attention of the right potential candidates.
Additional buyers for a seller-financed real estate deal could respond to an advertisement on an online classified website. There are many popular and low-cost consumer websites with networks all across North America. By including the search terms “seller finance,” “seller carry back” or the acronym “FSBO” in your online classified text, you’re sure to reach many potential buyers nationwide.
How to do the deal
Once an interested buyer is located and the details of the initial payment, payment term, interest rate, and any necessary clauses are established, the buyer and seller can move forward to create a seller-financed note.
The details of the note creation are easily handled with a standardized boilerplate or the assistance of an attorney. Then the paperwork is recorded at the courthouse and the note deal is finalized.
If you need to know more about selling real estate with private cash flows, I will be happy to help. I am a professional Note Finder and I can help facilitate the transaction for you, as well as help you find an immediate cash settlement for the property seller after the note is created.
sydney@smilingdogenterprises.com
How to Sell Your House Fast - At The Price You Want!
The Inside Secrets To Seller Financing
When it comes to selling real estate, one of the biggest obstacles sellers face is a so-called “depressed” market. Even when a property is highly desirable, it can be hard to get the price you want in this real estate environment. You could end up losing a lot of time, money, and opportunities, waiting for a “perfect buyer” who may NEVER materialize!
The traditional solution is to drop your asking price. But this common strategy doesn’t always work in your favor. In fact, it can work against you, making your home seem undesirable and your position seem weak.
But there IS a way to turn this challenge into a profitable opportunity!
The seller finance solution
More and more home sellers are turning to private financing to sell properties quickly and at the best possible price. Why? Because it’s a great way to attract an untapped group of potential buyers looking to buy a home outside of conventional financing.
Seller financing can put you back in the driver’s seat and turn ANY market into a SELLER’S DREAM!
You see, there is a large percentage of first-time home buyers who cannot get approved for bank funding because of their credit situation. These buyers will often offer to pay even MORE than the asking price for the opportunity to live the American dream of home ownership.
Once you understand a few secrets to seller financing, you’ll know why these “credit challenged” folks can be your “perfect buyers” and provide a positive solution for ALL parties involved…
Seller financing: a powerful tool to sell homes in a stagnant market
Private financing can lead to many more home buyers
Seller financing could help sellers get more money for their property
Sellers could still receive the cash they need when financing the sale of their property
How to Sell Your House Fast - At The Price You Want!
1. Seller financing can enable YOU to sell your home quickly and easily, at the price you want.
2. It gives the BUYER a chance to purchase a home that would otherwise be out of reach.
3. If a real estate agent is involved, it allows the agent to collect a commission from a sale that wouldn’t happen through traditional means.
So everyone wins!
Turning the sale into cash
But what happens if the buyer does not put down a substantial down payment and the seller needs additional cash to purchase another property? That’s where the beauty of seller financing comes in. It’s possible for the seller – now the mortgage holder – to turn around and sell the mortgage note for a lump sum of cash!
It’s easier and more common than most people ever imagine!
As a professional Note Finder, I specialize in helping holders of mortgage notes get immediate cash for their paper asset. In fact, if you or someone you know holds a mortgage note, I can help turn it into CASH right now!
“Seller financing is a powerful tool to remedy real estate situations that otherwise look grim.”
Liquidating your seller-financed notes
How a Note Finder Helps It All Happen For You!
There is a growing group of note business professionals known as “Note Finders” who are making it easier than ever to sell real estate notes. These folks are individuals who help Note Sellers find a buyer. Also known as cash flow specialists or note liquidators, Note Finders collect and organize information about potential note sales so that people who buy notes can easily determine if the stream of income is right for them.
Note Finders serve to inform Note Holders of their options. They also help to streamline the process of selling a cash flow by helping Note Holders to understand the process.
Note Finders know what types of note terms, interest rates, down payments, and payment schedules Note Buyers prefer, and are familiar with typical yield notes. Therefore, an experienced finder can give home owners pertinent information to structure a new note so that it sells quickly.
As a Note Finder, I have an in-depth understanding of the private note industry and I am able to approximate the value of most secured cash flows.
Keep in mind that Note Finders do not act on the behalf of either the Note Holder or the buyer and do not provide counsel to either party; we represent ourselves.
I can give you an idea of what makes a note attractive to buyers as well as present information about a note to potential buyers, but will not assist either party with the decision to finalize a note deal.
Seller Financing: Creating A Note For Quick Sale
Seller financing is a popular way to sell real estate without dropping the price. In fact, builders will often offer financing to sell the properties they’ve built in a difficult market without having to reduce their prices. When the property owner is willing to “carry back” a note many advantages can result:
1. The Seller can get a higher selling price.
2. The property can sell faster.
3. The overall sales closing ratio can increase.
4. The note can generate a steady payment stream for long-term income.
But in order to sell a house this way, the home owner needs to market the property to a different type of buyer.
Attracting “credit challenged” buyers requires a different strategy to reach a different demographic. The seller must use a more targeted marketing technique, designed specifically for the “unconventional buyer’s market.” And the most effective advertising methods to tap into this distinctly separate pool of buyers might surprise you!
Seller Financing: Creating A Note For Quick Sale
How much is a note worth?
When deciding to liquidate a seller-financed note the first step is uncovering how much the note is worth. To do that, it’s best to get inside the head of the Note Buyer.
Note Buyers always want a good deal, so most of them will usually begin by conducting a quantitative evaluation of the numbers on a cash flow. The two factors that buyers look at first are the note term and interest rate.
How term affects note pricing
To illustrate, consider these two similar notes with different terms. Assume that both notes have a balance of $100,000, with a fixed interest rate of 8 percent.
The first note has payments of $733.76 per month over 30 years (360 months), while the second note will be paid off in 10 years (120 months) at $1,213.28 monthly – a term three times shorter. For this example, assume that the buyer is looking to yield 15 percent on the remaining payments.
If no payments had been made towards the $100,000 balance, the buyer’s offer at 15 percent would be $58,030.25 for the 30-year note and $75,202.55 for the 10-year note. Based on the figures alone, you can see that the second note with the shorter term will receive a much higher offer.
An “interesting” consideration
The interest rate is also a important point for buyers when they start their note evaluation process. Specifically, buyers look for interest rates that are “just right” – neither too high nor too low. Interest rates that are too high will make it difficult for the Payor to meet her monthly payment obligations, making a foreclosure likely.
Conversely, when the interest rate is too low, many buyers find that the amount they can pay for the note typically won’t meet the seller’s needs. As a result, many buyers will avoid making offers on notes with extremely low interest rates because past history has shown that these deals can be difficult to close.
Yield vs. Interest = Discount
Here is the critical point: the amount of the discounted offer that a seller gets from a prospective buyer is usually a direct result of the difference between the interest rate and the buyer’s yield. A note with a lower interest rate forces the buyer to make up his yield from the discount instead of the interest that accrues each month. So, as the difference between the note’s interest rate and the buyer’s desired yield grows the offer to the seller decreases.
This effect can be illustrated using two notes, both written for $100,000 and amortized over 30 years. The first has an interest rate of 3 percent and payments of $421.60. The second note is amortized at an interest rate of 10 percent with monthly payments of $877.57.
If the buyer wants to yield 15 percent on the remaining payments (with no payments made yet), the offer for the first note would only be $33,342.72 on the 3 percent note, but $69,403.63 for the 10 percent note. Remember that the balance on each note was $100,000, so the discount is $66,657.28 and $30,596.64 respectively… simply because of the difference in interest rate.
Any experienced buyer who runs these figures will realize that almost all Note Holders would find a discount of $66,000 or more on their $100,000 note very difficult to swallow. A few buyers might consider lowering their personal yield requirements in an attempt to reduce the discount – if the note has other compelling attributes.
I look forward to talk with you further about any of the strategies explained here. Please contact me if you’d like to discuss this information or for help with any of your note transactions.
Seller Financing: Creating A Note For Quick Sale
Greetings,
My name is Sydney Griecci. As a professional note finder, I specialize in developing creative cash solutions; namely, I help note holders receive a lump sum of money in exchange for their secured real estate notes. I can also show home owners how to sell their property with seller finance.
Once a real estate note is created, it can be sold for cash shortly after the close of escrow. Existing notes can also be sold to achieve cash liquidity.
Additionally, if you are looking to purchase a paper asset for your own portfolio, I have the resources to show you many viable opportunities.
If you are an attorney, CPA, real estate agent, mortgage broker, title agent or escrow officer, I can assist you in helping your clients realize quick sales of hard-to-sell properties through the use of private financing.
If you would like to learn more about the creation and/or sale of secured private notes, please contact me directly.
Join my mailing list or subscribe to this publication by leaving me your contact information.
Using unconventional marketing to attract the “credit challenged” buyer
The seller’s best strategy for finding credit-challenged buyers is to advertise the property in media that is read or seen by individuals who do not have a real estate agent.
The “For Sale By Owner” section in the local newspaper is the best place to start, because that’s where the majority of home buyers go when looking for seller financing. Even in today’s Internet-dominated business world, newspaper advertising continues to be the best way to reach those looking for seller-financed deals.
All it takes is a simple sale ad including the line “seller financing available,” “credit issues OK” or “little or NO down payment needed” and you should catch the attention of the right potential candidates.
Additional buyers for a seller-financed real estate deal could respond to an advertisement on an online classified website. There are many popular and low-cost consumer websites with networks all across North America. By including the search terms “seller finance,” “seller carry back” or the acronym “FSBO” in your online classified text, you’re sure to reach many potential buyers nationwide.
How to do the deal
Once an interested buyer is located and the details of the initial payment, payment term, interest rate, and any necessary clauses are established, the buyer and seller can move forward to create a seller-financed note.
The details of the note creation are easily handled with a standardized boilerplate or the assistance of an attorney. Then the paperwork is recorded at the courthouse and the note deal is finalized.
If you need to know more about selling real estate with private cash flows, I will be happy to help. I am a professional Note Finder and I can help facilitate the transaction for you, as well as help you find an immediate cash settlement for the property seller after the note is created.
sydney@smilingdogenterprises.com
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