Note buyers are persons whose job it is to find existing contracts between two parties, where one of the parties is paying the other a monthly note until such contract is paid in full. Such notes may be real estate notes, commercial mortgage notes, trust deeds, land contracts, cash flow notes and others. Note sellers on the other hand are those persons who hold notes that take years before they can be paid in full and usually in monthly installment payments. The reasons why they sell their notes are usually because they need cash to pursue other ventures, when they are approaching retirement and would like to travel or to invest in a more profitable business, liquidate non-performing notes and use the cash to invest in other notes or stocks, or others need cash for emergency reasons.
The key to selling notes is to find the right buyer. There are professional note buyers or note brokers who are friendly and patient that will guide you in the whole process of the business. They are usually affiliated with commercial companies or mortgage buyers whose business is wholly into note buying and locating note investors. You can find them in your local directories or you can surf the Internet for easy access on their websites. Mostly, they have an online free quote form where you can click on and provide information on the notes that you are about to sell. You can actually sell the whole value of the note or a fraction of it. There are many available options for you and the professional note buyer will explain it all.
Professional note buyers will get in touch with you after they receive your formal quote or your call, and they will give you details on the price value of your note and the different steps in the buying process. Steps in the buying process involve the pricing phase, where the note buyers will give a price for your notes based on the information that you have provided. If you agree on the price offer, the note buyer will prepare a formal purchase agreement and the list of document requirements. Once these documents are submitted and signed, you will enter the due diligence phase. This phase signals the confirmation of your note. The buyer will order title updates, review the condition of the title, and visit the site at their cost. After the buyer finds everything in order, you will proceed to the final or closing phase. At the closing phase, your notes will be recorded including the necessary documents, and you will receive the cash that you agreed upon for the note that you sold.
The note buyer usually considers his risks first and foremost before he agrees to buy your note. He takes into account the balance of your note, financial stability of the borrower or creditor, the balance of the note to be paid, interest rates and other details. The less risk he has the higher price offer you will get for your note.