Do I Need an Appraisal before I sell my real estate note?

by Nationwide Secured Capital

Note Holder often ask, do I need to know the value of my note before I Sell My Real Estate Note?

When you have decided to sell your mortgage note, there are a few things to expect. One of them is an inspection of some kind.Mortgage note buyers will want to know the condition of the property that the note is secured by. At the minimum, and depending on the note buyer, a Broker’s price opinion, or BPO, will take place.

What is the difference between inspections, appraisals, and BPO’s?

An inspection can range from a typically a general observation of the exterior of the property to a complete home inspection. The information from an inspection may include whether or not the property is occupied, if there is any apparent damage to the property and whether there is any obvious threat that could impact the value of the property. A general inspection can done by almost any person and can include a general “drive by” of the property.

A complete home inspection will include what a person walking through a house cannot see. This inspection will tell you if the foundation is cracked or if the A/C unit is about to die. Other items inspectors may note are termite damage, roof condition, electrical issues, plumbing issues, drainage, and flooring problems. These home inspections should be completed by licensed or certified inspectors

A BPO is performed by a real estate professional, not necessarily a broker. It can be an appraiser, a real estate agent, or a broker. It can be a “drive by” which will be the exterior of the property or can include the interior if the person has access. . BPO’s usually determine a general listing price when selling a home. A BPO can include the size, type, and age of the property. A complete BPO will have the characteristics of the neighborhood and some values of similar properties nearby.

An appraisal is more detailed than a BPO and often include statistics, analyzation of data, pictures, and other information related to the specific party. Appraisals will often include the interpretation of the information along with information from public records. Pictures of both the interior and exterior of the property will be taken. Notes about any architectural features, and necessary repairs will be used to support the valuation of the property. Appraisers are licensed or certified depending on the state. When the note buyer is ready to move forward with the purchase of the note, the seller will know what to expect when one of the above is requested.

HOW SELLER FINANCING CAN WORK FOR YOU

by Nationwide Secured Capital

HOW SELLER FINANCING CAN WORK FOR YOU

  • Are you thinking about selling your property TODAY?
  • Do you need to sell it QUICKLY? Maybe you need ALL of the money NOW, or have relocated or found another house to live.
  • Has your property been sitting on the market longer than you want?
  • Do you have interested buyers but they are not qualified for a traditional loan at the bank?
  • Can you NOT “wait it out” until market conditions improve for it to be easier to sell your property and get what you are looking for?
  • DO YOU WANT TO SELL YOUR PROPERTY FAST?!?!

If you answered “Yes” to any of the above, then read on.

Creating a Seller Financed Mortgage Note will help you sell your property FASTER in   any market…AND you can also walk away with cash in your pocket shortly after closing when you create your note correctly

What is a seller financed mortgage note?

The seller takes on the role of the lender. The seller extends credit to the buyer in order for the buyer to purchase the house.

WHAT IS A SELLER FINANCE NOTE AND HOW IT CAN HELP YOU

The pool of eligible buyers who are qualified to purchase your property with a loan is considerably smaller than it was a few years ago.  This is due to the collapse of bank lending from bad loans the bank made. There are now many good buyer/ borrowers out there who cannot obtain a bank loan. There is no place for them to turn.  They would love to buy your property!

NOTE OVERVIEW

A Seller Financed Mortgage Note, also known as a promissory note (Note), is a written promise by the buyer of your property to pay a certain amount of money in the future – normally as a series of payments, and its’ payment in full is normally secured by property  that you have sold to the buyer, (the property acts as collateral guaranteeing you will be repaid).

You can loan money to your buyer (and become a lender), when you sell your real estate. You do this with seller financing and carry back a Note.  You essentially provide them some or all of the money they need to purchase your property or business – with the agreement that they would pay you back with interest. Normally the property acts as collateral on that loan.

SELL YOUR PROPERTY FASTER WITH A NOTE

A Note will help you sell your property FASTER in any market because:

  • Seller Financing is faster than a traditional loan. It can happen as quickly as 21-30 days. This solution is great for Rehabbers & Flippers.
  • You increase marketability of your property by at least 20-25% if you offer Owner Financing because you are able to attract an expanded and larger pool of buyers who do not qualify to the stringent traditional bank loans in today’s market; e.g. lower credit scores, good credit with past bankruptcy or foreclosure, poor credit.
  • You are offering a financing Solution for Properties that Banks don’t fund…these are outside the Bank-box. Some Properties (and Buyers as mentioned above) do not qualify for a traditional bank mortgage due to bank restrictions; e.g. Mobile home & land, Churches, Mobile home parks, Storage units, Gas Station and/or Convenience stores, Land notes, etc.

A benefit is receiving top value. You can get full market value for your real estate. Since you’re able to sell to someone who can’t qualify for traditional a mortgage, you can get the price you are asking for. Banks and mortgage lenders rarely lend over the appraised value of a property.
Another benefit is Cashflow, Receive a steady stream of income. This is if you don’t need/want to have all the money at once; e.g. avoid taxes.

 

Related Articles

http://nationwidesecuredcapital.com/Sell-My-Note/seller-financing/
http://nationwidesecuredcapital.com/Sell-My-Note/the-process-of-selling-your-property-creating-a-note/
http://nationwidesecuredcapital.com/Sell-My-Note/how-to-sell-a-note-cash-today-versus-cash-in-the-future/
http://nationwidesecuredcapital.com/Sell-My-Note/how-to-structure-a-note-for-maximum-value/

The Importance of Getting a Credit History When Selling Your Note

by Nationwide Secured Capital

When converting your long term investment into cash by selling your note, credit history of the borrower/payer is important. In the process of selling a note, a number of factors come into play. The borrower’s payment history, which is how long and whether payments are on time, is needed.  Most buyers will required though, a new credit history and score of the payer before continuing with the sell of the note.

Some may say that proof of the borrower’s credit is in the months or years of consistently paying on time. What is not known is the current financial situation. Situations may change for the borrower since he/she first bought the property. A loss of job or divorce could be making the borrower stop payments on other debts and would eventually stop paying on the note. The payer’s credit worthiness might mean that paying off the note is not a priority. A current and up to date credit history will show if all debts or current or in default.

Besides equity and terms of the note, having the current credit score of the borrower gives the buyer of the note a better assessment of the risk involved.  A change in status would affect the ability for the note to be paid on time or at all.  If this is the case, this does not necessarily mean that the note could not be sold.  There would probably be more of a discount offered in this situation.

In general, many note buying companies will discount the note more when a lower credit score is found on the borrower.  The risks become higher, therefore the amount offered on the note is less.  What can help offset this situation is if a lot of equity has built up over time or a large down payment was given.  A comfort area has been created with the buyer of the note and defaults rarely occur in these situations.

In selling your note, be prepared to shown the payment history, and credit score of your borrower.  This will help your case in getting the best offer in the sale of your note.