Posts Tagged ‘land contracts’

You can sell land contract agreements to a professional note buyer for a lump sum of money. Many people choose to finance their own property sale, which can be beneficial to both the seller and the buyer. One of the main advantages is that they can avoid the hassle of dealing with a bank or other lending institution.

Instead, the buyer agrees to a down payment and monthly installments to the seller for the term of the contract. The seller maintains title to the property until the loan is paid off. The buyer agrees to maintain the land and any structure built on it. He may also be responsible for paying the taxes and keeping the insurance up to date. If the buyer defaults, he may lose all of the money that he has paid on the property, as well as any improvements he has made to it.

But sometimes, it becomes necessary to sell land contracts for cash. Maybe a personal or medical emergency arises that leaves the property owner in need of quick money. Maybe the purchaser of the land has been behind a couple of times in his payments and the seller is just a little nervous about future ones. Maybe one of the kids is about to graduate from high school and is headed to college and the seller needs money to fund their child’s education. For whatever reason, the decision to sell has been made.

There are many companies out there who are willing to buy your interest in these notes. So, it is important that when you sell land contract agreements; you start out by getting quotes. Keep in mind that you will not get the total amount of money that had been financed. This total was based on the principal balance plus the amount of the interest that was expected to accrue. Since the interest hasn’t been realized yet; you will get a discounted value when you sell land contract payments. The cash value will depend on a lot of different factors as well as the individual company’s policy.

But getting the most cash may not make it the best deal. There are other things to consider when you choose your buyer. For instance, if you only need a portion of the value of the loan agreement, will your buyer allow you to only sell him part of it? Is the buyer willing to answer your questions? Is it a reputable company?

When you sell land contract agreements, not only do you get needed cash but there are other benefits as well. You no longer have to worry about the property buyer defaulting on the loan. Nor do you have to worry about him damaging your property or doing anything that will lower its market value. All of the risks and responsibilities of your original note pass on to the company that you have chosen to purchase your rights to future payments.

Deciding to sell land contracts to a buyer is an easy choice if you need quick cash or you want relief from the risks and responsibilities of the original loan agreement.

Jamie has been working in the finance industry for many years and is a contributing editor to http://www.selling-your-note.com. Find out how to sell land contracts and get free, no obligation quotes from a professional note buying team on our site.

Author: Jamie Sherman
Article Source: EzineArticles.com
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There is one simple reason that people sell real estate notes, and that is to raise cash quickly. To achieve the desired result, however, you must make sure you’ve done your research: that you are selling to a reputable buyer or group of real estate note buyers, and that the buyer of the property you are financing has a reputable credit history.

A real estate note is the document created when financing the sale of a home or other (likely investment) property. Different categories of real estate notes include mortgage notes, land real estate contracts, and contracts-for-sale. Holding a real estate note means that payments are coming into you, but often, depending on the financing, those payments are small and trickle in, rather than providing a quick influx of cash. This is the reasoning behind selling to note buyers.

There are a couple of options when selling real estate notes. When choosing between these options, take into account your goal in selling the note. If you only need a smaller, quick influx of cash, it might be in your best interest to only sell a portion of the note. If you need something more substantial, you will likely want to sell the entire note. Whichever happens, the payments made by the buyer are the same-they will just make the payments to the new note holder instead of to you.

Selling only a portion of the note means selling “x-amount” of payments to the real estate note buyer. Many buyers will do this, but others will not, so be up front with how much of the note you would like to sell at the beginning.

While you will likely not get the true face value of your real estate note if choosing to sell it, there are other things to keep in mind when selling that will make sure you get as much value as you can out of the note. First, and most important, is that when selling, you should pay no up front fees to buyers. Most reputable buyers will check your buyer’s credit and give you a quote on the note without charging you any sort of “processing” fee.

Make sure that the note buyer checks the property buyer’s credit up front before quoting you on a price for the real estate note. A sign of an unethical buyer is quoting one price initially, then quoting a lower one later using the property buyer’s credit score as an excuse. This is a simple bait and switch and a strong sign that you should not deal with these real estate note buyers.

Get several quotes before selling. This can help to ensure you get the best value for your note. If possible, it is best to wait until at least six payments have been made on your note before attempting to sell; this is because buyers will be more likely to pay a higher price for a note that is considered “seasoned,” knowing that the property buyer is reliable in making payments.

Chances are, you will get somewhere between 20 and 30 percent less than the remaining value of payments due on the note. This is fairly standard, and though the discount seems steep, it is probably the best value you will get on the note. If you have not received an offer that is satisfactory, you can hold out until your note is more “seasoned.”

Selling notes that you hold can be a good way to get a quick influx of cash. Just make sure that you’re careful and don’t rush into it, and it can be beneficial for you and for the note buyer.

Stephen V. Richards is a real estate expert specializing in advising sellers and brokers on the best times to sell real estate notes to real estate note buyers. He has weathered the mortgage storm and advises a number of successful clients on managing their real estate contracts.

Author: Stephen V. Richards
Article Source: EzineArticles.com
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A contract for deed, also known as a land contract, is basically a financing agreement between the buyer and the seller of a home.

Essentially, by signing a deed contract, the seller agrees to give the deed to the home to the buyer once the buyer has paid off the contract. This kind of financing carried by the owner can include the balance of a mortgage or, instead, the property might be fully owned.

Sometimes known as “rent-to-own” or “installment sale contracts,” land contracts historically offered lower borrowing rates than most lending institutions. But, once banks began offering lower interest rates, they became less popular. However, this seller-financed option is making a comeback.

This article will go over the benefits and drawbacks for both buyers and sellers. Keep reading to learn more.

Benefits to the Buyer:

1. Less stringent qualification requirements, though the seller can ask for a copy of the buyer’s credit report.

2. Usually the seller will offer negotiable down payments and greater flexibility.

3. More freedom to negotiate length of contract, terms and interest rate.

4. Lower closing costs with no service fees to pay.

5. Faster purchase closing.

Benefits to the Seller:

1. Can normally ask a higher selling price with less inspection restrictions.

2. Income can possibly qualify as deferred gain, significantly reducing taxes.

3. Provides a monthly income.

4. Can offer a better rate of return than investing the sale amount.

5. Simpler way to sell non-conforming or difficult properties.

6. Faster purchase closing.

The Importance of a Title Company and Trustee

For the inexperienced homeowner or buyer, having the insurance of a trustee can stem a lot of insecurities. Basically, the title company will draft and insure a land contract that includes a Vendor (the homeowner), Vendee (the home buyer) and a Trustee.

The title to the house and all interest payments are assigned to the trustee. If the buyer (or vendee) stops making payments, the trustee will then foreclose on the sale. In turn, if the buyer successfully finishes making their payments, the trustee insures the buyer receives the full title to the home.

Before You Sign

Before you commit to a land contract sale, always obtain an appraisal of the house value, acquire title insurance, consult with a real estate lawyer and hire a holding company or trustee to hang onto the deed and all contract documentation.

Remember, contract for deed sales are usually friendly, but it’s still business so all parties involved need to work together with professionalism.