Connecticut, the 5th state admitted to the union, is the 29th most populous state and 48th biggest in terms of area. A good number of the properties in that area have been sold using owner financing, and a Connecticut note created. The holder of that note has the option of keeping the note or later selling it to a Connecticut note buyer.
Why would someone sell a house or building using owner financing? There could be a number of reasons, but some common ones are:
- Both the buyer and seller wanted to close the transaction quickly and without any hassles
- The seller chose this path to receive future income
- The buyer’s credit was not sufficient to receive a bank loan
- The property was not conforming to bank guidelines
Prior to preparing any documents, the property seller will want to decide on the value of the property, the terms such as the interest rate and length of time, and the minimum credit to look for in a potential buyer. Line up an attorney or title company to advise you and to later prepare the documents.
When you have a buyer for your property, get to know them and check their credit history. After all, you want to make sure that the person has the ability and character to make ongoing payments to you.
Once you have checked out your buyer and the two of you have agreed on the financials, get everything in writing. This is where you pull in your attorney or title company to prepare the documents and manage some of the transaction. When everything is complete and signed, be sure that your mortgage gets recorded with the county. Put your original documents, especially the note, in a secure place, like a safe deposit box.
Managing Your Note
All of the paperwork has been completed, so now you can just wait for the money to roll in each month, right? Well, not quite. You still need to dedicate some time to:
- Check that property taxes are paid promptly.
- Be sure that the fire insurance policy is kept current.
- Either drive by the property yourself or have a trusted friend do so periodically to ascertain whether the property is being well maintained.
- In case of any late payments, get in touch with the payer right away to let them know their responsibilities.
Some of the above can be time consuming, so you may consider selling your note. If the property buyer ever stopped making payments, be aware that it will take months or even years to get the property back.
Selling the Note
If it is too much of a hassle managing the note or you just want to cash out now, you will want to find a good Connecticut note buyer. An excellent note buyer will offer you a fair price for your note, explain the process in detail, and answer all of your questions completely and honestly. This will include explaining different ways to sell your note, such as selling only some of the payments (called a partial). Normally, from the time that you send over copies of your documents to the Connecticut note buyer until you receive your funds takes 4-5 weeks.
Seascape Capital has purchased notes in most of the 50 states. Seascape has an A+ rating from the Better Business Bureau, and has been in business since 2002.