Over the last couple of years, one of the questions I get asked most often is, how do I sell my real estate note? Because of the recent real estate bust, many home owners that had to sell their homes for one reason or the other, had to sell on a land contract or take back a mortgage note as banks were not giving loans in many cases. Because of the drastic drop in property values, the properties would not appraise for what the owners needed to sell their homes for, so taking back a real estate note was the best option at the time.
Today banks have done an about face in their lending practices and have very stringent requirements and require larger down-payments. Gone are the days when you could buy a new home with nothing down and in many cases pay interest only. A large segment of the US population is just getting back on their feet and because many were without jobs for so long and had trouble paying their bills on time, they got big dings on their credit.
Even those that bounced back and are making very good incomes today are having trouble qualifying for a conventional mortgage. There is a large segment of the population that is cash rich but credit poor. Because of this unique situation, buying a home on a land contract and paying a little higher interest rate for a few years until one can re-establish a credit rating that will allow one to meet the strict requirements of the banks.
Since January 1, 2014 one of the biggest changes regarding real estate or mortgage notes and land contracts is that the very common balloon payment after one is a couple of years into the contract is strictly taboo. The new Dodd Frank bill that went into effect at the beginning of 2014 requires the note to be amortized over a certain period of time without any balloon payments permitted. The reason for this is that in the past, there were many unethical real estate investors that would sell on a land contract with the expectation that the buyer would not be able to clean-up their credit and pay the balloon payment. Since they were not able to re-finance with a conventional bank loan and pay the balloon payment, the holder of the real estate note would take back the house and resell it and the purchaser of the home would lose any equity that they had in the property.There were many unethical investors that would sell the same property over and over with no intentions of really selling the property.
Just for clarification, depending on the State you live in, real estate notes are often referred to as Title for deed, land contract or a mortgage note. They are all the same thing, so don’t get confused if you are talking so someone from out of state that uses a different name to label the same concept. They are all real estate or mortgage notes.
The business of the Real Estate note buyer is to buy and to sell real estate notes, so if you are ever asked the question, “how can I sell my real estate note”, you will know the answer to the question. First Equity Note, LLC should be your preferred contact for either buying or selling any mortgage note or Land Contract.
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If you have notes and you would like to know how to trade them, the process is easy. Real estate notes are in demand and so you do not have to worry about the market. You can trade them to institutions such as banks or to individuals. Here is what you ought to know about sell my real estate note. Read More
The question that intrigues me the most is how can I sell my real estate note. Home owners, in recent times, had to sell a land contract or take back a mortgage as banks were unable to give loans in time. Cashing in with immediate cash disposals becomes possible by selling real estate notes. Selling a note is far more convenient, in case, there is the need of extra cash flow. Read More