The Volunteer State, stretching from Memphis east to Bristol, is the 17th most populous state and ranks 36th in area. In 2015, median real estate prices ranged from $400,000 in Williamson County down to less than a tenth of that in Decatur County.
Regardless of the property value, selling a property using owner financing is a model that many Tennessee citizens have used successfully. When a house, building, or other property type is sold with owner financing, banks are usually not involved, so the process can be faster and more efficient. When the property is sold and a note created, you have the option to sell a Tennessee mortgage note.
Guidelines to Get Started
There are some general guidelines to follow when setting up the transaction and mortgage note:
- The bigger the down payment from the buyer, the better. Try to get at least a 10% down payment when selling a house and a 20% down payment for other property types.
- Sell to a person with a good credit score and a history of paying their bills on time. This helps limit the chance of a later default.
- Use an attorney or title company to prepare the documents. Only experienced real estate professionals should consider preparing their own documents.
You Have Sold the Property, So What’s Next?
The transaction has closed and the buyer has started making payments to you. You’ll have some choices to make. First, you could decide to keep the note and collect all of the payments yourself. The risks with this are:
- A possible default by the buyer
- You making sure that the taxes and insurance are always kept up to date
- You will probably need to wait for years to get all of your money. A lot can happen with your buyer and to real estate market trends during that time.
A different alternative is to sell your Tennessee mortgage note to a note buyer. A good Tennessee mortgage note buyer will go over different options for selling your note, explain the process thoroughly, and offer a fair price for your note. The options for selling your note would include selling the full note or just selling some of the payments (called a partial). Once you and the Tennessee note buyer have agreed on a price, the basic process is:
- You will be asked to provide copies of all of the documents and give permission for the note buyer to check the payer’s credit.
- The note buyer will pay for an appraisal and title search, which combined take about two weeks.
- Assignment documents will be sent to you from the note investor, which you return with your signature along with the original note and original mortgage.
- Within 1-5 business days, depending on the investor, the proceeds for the note will be wired to your account or a check sent.
Seascape Capital is a nationally known real estate note buyer that has been in business since 2002. Seascape has continually kept an A+ rating from the Better Business Bureau.