The “Hoosier” state was the 19th state admitted to the union – on December 11, 1816. The word “Indiana” is a reference to the local Indians, though less than 8000 Native Americans actually live in the state. Of the over 6 million people who do live there, many have sold properties using owner financing. For detailed information about Indiana real estate trends, visit HERE.
When a house or building is sold using owner financing, a real estate note is created. The person who sold the property has the option of keeping the note or selling it to a buyer of notes in Indiana. There advantages and disadvantages of each, most relating to the need for cash, the seller’s age, and the marketability of the note.
Setting Up Your Note
To make your note most secure and marketable, keep in mind these strategies:
- Check the credit rating of potential buyers and try to sell to someone with good credit.
- Collect a reasonable down payment, which usually means 10% for houses where the buyer will live there or 20%-plus for investor houses, other property types, or when dealing with buyers with weak credit.
- Unless you are a real estate expert, always have an attorney or title company work with you to prepare the documents.
Selling a Note
While receiving income on a note sounds like a good idea, it is not for everyone. A note holder may have to put up with issues like:
- Late or missing payments
- Unpaid property taxes or insurance
- Property damage that reduces the value of your collateral
- Very long foreclosure periods before you get back the property after a default
A good buyer of notes in Indiana will help you understand the value of your note and various options for selling it. When selecting an Indiana mortgage buyer, be sure that the company has been in business for at least five years, has a high rating from the Better Business Bureau, and seems competent and trustworthy to you. An excellent note buyer will explain to you the variables affecting your note’s value and why you might want to sell all or just part of the note. Once you and they have agreed upon a price and they have verified the property buyer’s credit, the process generally goes like this:
- You will send copies of all requested documents to the company and sign an agreement showing the price.
- The note buyers will pay for a drive-by appraisal and a title commitment, which together generally take about two weeks.
- You will receive documents to assign your note to the note buying company, after which you sign and send them back with your original note.
- Within a few days, they will wire the funds to your account.
Seascape Capital has been a buyer of notes in Indiana and other states since 2002. Seascape is fully licensed and has an A+ rating from the Better Business Bureau.