Selling A Note Tips?

Tips For Selling A Note If You Currently Own A Note:

• Hold the Note for at leats 3 months before selling and if you can hold it for 12 months before selling a note, even better
  
• Be sure you have good documentation on the buyer's payments. These should include copies of cancelled checks or bank statements showing deposits if the buyer paid in cash
  
• If you have a very long amortization period, consider changing it to a shorter period, say 15 or 20 years. For notes with 40 and 50year amortizations, (Yes, I see them) consider getting them down to 30 years. Get a quote on your current note first as there are some note buyers still out there that are primarily interested in long periods of cash flow. You can also get a "what if" quote for the potential revised note. The difference may not be worth the effort and this difference will vary over time.
  
• If you are considering (after getting a quote for your long term note) revising the note, you will obviously need to work this out with the buyer. They will need some incentive to cooperate such as a slightly lower interest rate. Get a professional note buyer to help you work the numbers. I once had a note holder call me with a 50 year note. By lowering the interest rate a little, he was able to get the amortization down to 30 years. The payment for the buyer went down slightly and the note would be paid off in 30 years, making selling a note easier. It was a win, win for both.
  
  

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Tips For Selling A Note If You Are Creating A Note To Sell Your Home:

• Don't set the amortization period for too long a period. 15 or 20 years should do but if you have to go to 30 years to get an acceptable payment to the buyer, don't worry.
  
• Get as high an interest rate as you can. Realize, you are in control. The higher the rate is above market rates, the more money you will receive when selling a note.
  
• Be sure you make it clear to the buyer when each month's payment is due, what any late payment charges are and when they will occur and that you want either a check or money order for all payments.
  
• Don't forget to have the buyer's insurance agent put you on their policy to be notified of any changes, lapses, etc. on the policy. (Check this at least once a year just in case.)
  
• Create an amortization schedule for both the buyer and yourself (post all payments received to this schedule.)
  
• Get a good attorney (yours, not the buyers) to handle the transaction.
  
• Establish a secure (from theft and fire) location to maintain all your closing documents as well as future documents (Payments, verification of insurance, property taxes, etc.)
  
• Keep meticulous records of all payments (date, check number), insurance and tax verifications, etc.
  
• Don't forget the tax man. Report your interest income and possibly capital gain on you taxes. Consult a good tax professional to be sure you handle this correctly.