The Keystone State, one of the original 13 colonies and having a population of almost 13 million people, has a rich history and varied terrain. Real estate types and price differ across the different regions and towns.
Owner financing is a method of selling property that has many advantages over typical ways, yet is poorly understood by many. If done correctly, using owner financing and carrying a mortgage note can be lucrative with minimal risk. Basic elements in doing it correctly include:
- Obtaining a down payment of 10% or more on owner-occupied houses, 20% on rental houses and commercial properties, and even more on land parcels.
- Making sure that the note is personally guaranteed by a buyer with good credit
- Enlisting the aid of an attorney or title company to create all of the transaction documents
- Complying with all state and federal regulations, especially if you sell multiple properties in a year
Doing the above helps protect from default and makes your note more valuable if you decide to sell it to a mortgage buyer or note broker for Pennsylvania.
STEPS FOR SELLING A NOTE
Creating a note can be more lucrative than getting a bank involved, as you collect not only the principal but also all interest over the term of the note. At any point while you are collecting payments, you can choose to get a lump sum of cash by working with a note broker for Pennsylvania. If you decide to pursue this route, choose a note investor or broker who is competent, honest, and service-oriented. The essential steps for selling a mortgage note are:
- Agree upon a purchase price for the note, and send copies of relevant documents to the note buyer.
- The note buyer will order an appraisal and title commitment for the property, usually at the buyer’s expense
- The above can take 2-4 weeks, after which assignment documents will be sent to the note holder.
- The note holder signs the documents and mails them back to the note buyer with the original note and mortgage.
- In 1-5 business days, depending on the particulars of the note buyer, the note buyer will wire the funds to the note holder, and the assignment is complete.
Seascape Capital has worked with a large number of Pennsylvania note holders and provided aggressive pricing and excellent service to all of them. Seascape has been in business since 2002 and has an A+ rating from the Better Business Bureau.