Sell Your Note To Michigan's
Top Note Buyer
- Selling the Note
- Keep or Sell
- Sell A Note Or Contract For Deed
We will ask you to provide information about the note and the property, as well as request a copy of the note. If the price is acceptable to you, we begin our due diligence process. We pay for all the expenses, so the price is net to you!
Michigan, our 26th state and one that borders four of the Great Lakes, has almost 100,000 square miles of land. Perhaps you owned a piece of that land, sold it using owner financing, and now wish to sell a Michigan note. You have come to the right place to learn the basic processes and what to do.
When you sold the property – normally a house, commercial building, mobile home with land, or a vacant land parcel – you and the buyer created a note. The note can also be referred to by other names such as a promissory note, mortgage note, or real estate note. Regardless, the note states the interest rate, term, payment amount, date that payments are due, and what happens if there is a default. Unless a land contract was used, the note is usually accompanied by a mortgage that makes the property collateral in case of later default. The note or land contract should always be signed by the buyer of the property.
When the buyer has made a few payments, you may decide whether to sell the Michigan note or keep it. The risks of holding on to the note yourself include:
- Late payment or no payment at all (default)
- The buyer not maintaining the property, which directly affects the value of your collateral
- The buyer failing to pay the property taxes and fire insurance
- If you are elderly, the payments may outlast you, which can be a headache for your heirs
Selling the Note
If you would rather have cash now instead of waiting for the payments, be aware that you do not have to sell the full note. If you do not need all of the cash from the note, you can choose to only sell some of the payments (called a partial). Let’s pretend that the balance on your note is $75,000 but you only need $20,000 to pay off some debts. An excellent Michigan note buyer like Seascape Capital could bring you various options, including one to give you $20,000 in exchange for buying a certain number of payments. The process and paperwork for selling a full or partial note are nearly identical.
Once you and the note investor have discussed all aspects of the note and agreed upon a price, the process begins for selling your note. Here are the typical steps involved:
- You will be asked to sign an agreement showing what had been discussed, and to send copies of documents related to the original transaction
- A processor at the note buying company will review the documents and ask any needed questions.
- The note buyer will order an appraisal. Most of the time, this will be a drive-by appraisal or broker price opinion, which are faster than a full appraisal and don’t bother anyone living or working in the structure.
- Next, the note buying company will order a title search to ensure that there are no other liens against the property and that property taxes are current. Taken together, this and the previous step usually take 2-3 weeks.
- Assignment documents will be mailed to you by the note buyer. You sign those documents and return them with your original note and mortgage.
- Within 1-5 business days, depending on the note investor, your funds will be wired to your bank account.
Seascape Capital has been involved in the purchase of a number of Michigan notes. Seascape has an A+ rating from the Better Business Bureau and is fully licensed in its home state.
Alabama, the 22nd state admitted to the U.S. (December 14, 1819), stretches from Mobile at the southern tip through a wide variety of countryside and rivers up to Montgomery and on to Huntsville. Many of the houses, mobile homes, and buildings along the way were sold using a contract for deed or a mortgage. A contract for deed, often called a land contract, allows a seller to provide owner financing to the buyer, who can then take possession. However, the seller keeps the legal title to the property, which is different from the more typical mortgage or deed of trust.
Whether you are considering selling a property using a contract for deed or a mortgage, many of the fundamentals apply equally when selling:
- Try to sell to a buyer with decent credit, which means a minimum credit score in the mid-600’s.
- Obtain as large of a down payment as possible. If the buyer will be living in the house, that means at least 10%. For all other situations and property types, aim for 20%.
- Always have a knowledgeable person draw up the documents. Usually, that means an attorney or title company.
Keep or Sell
Once you have sold the property using owner financing and collected a few payments, you have a decision to make. Do you keep the note or sell it to a note buyer? There are advantages to the first option of keeping the note, but there are also risks. These risks relate to the property buyer and include them not making their monthly payments to you, letting the fire insurance lapse, not keeping up with property taxes, and allowing or causing danger to the property.
If you want to explore selling to a mortgage note buyer, be aware that there a lot of them out there, but not all of them are good. Look for someone with at least five years of experience as a note buyer, who is fully licensed in at least one state and has a high customer rating from the Better Business Bureau, and who can competently answer all of your questions. Of course, also trust your own instincts on whether your contact person seems trustworthy and is likely to give you a fair price.
Sell A Note Or Contract For Deed
If you decide to sell your note or contract and have found a note buyer meeting the above criteria, you will want to understand the process. Here are the normal steps:
- You and the mortgage note buyer agree on a price to either sell all or some of your payments.
- You will be asked to sign an agreement to move forward, and to provide copies of all documents related to the note.
- Once the note buyer receives those items, they will review them and order a drive-by appraisal, at their own expense.
- Next, the contract for deed note buyer will order and pay for a title commitment in order to see if there are other liens against the property.
- Finally, assignment documents will be mailed to you, which you sign and return along with your original contract.
- Funds are then wired to you within a few business days of receiving your completed and signed documents. From Step 2 to Step 6 normally takes about 3-5 weeks.
Seascape Capital has been involved in many sales of Alabama notes and contracts for deed. Seascape is fully licensed and has an A+ rating from the Better Business Bureau.
