After deciding to sell your real estate note, the next step is finding a professional note buyer.
And not just any note buyer.
With your money and future on the line, you want to find the right buyer for you and your mortgage note.
7 Tips for Finding a Trustworthy Mortgage Note Buyer
Like agreeing to seller finance, selling your mortgage note can be a difficult decision. Choosing the company that fits your needs is priority one.
Here are seven things to look for when finding a trustworthy and experienced note buyer.
1. How Long Have They Been in the Industry?
While everyone starts somewhere, there is a learning curve when it comes to buying real estate notes.
A learning curve you don’t want to be a part of.
When choosing a note buyer, find one that has been in the industry for several years.
They have already had their learning experiences, leaving them with the expertise needed to set up a successful deal.
2. Spotless Records and Reputations
A quick Google Search will tell you if a company has ever been accused of scams, unlawful behavior or fraudulent cases.
Additionally, take a look for any reviews from past clients.
3. No Hidden Fees
Before signing any deals, make sure that all fees and services are listed up front.
Some companies charge thousands of dollars in hidden and unlisted fees. It’s essential to partner with a note buyer willing to tell you your options from the beginning.
Having a note buyer that immediately offers transparency gives you peace of mind.
And the same goes for quotes.
When getting the ball rolling, ask about no-obligation quotes.
Any reputable company will offer a free, no-obligation note analysis to let you know what your note is worth before moving forward.
4. Performing versus Non-Performing Note Buyers
Another critical question to ask prospective note buyers at the start: do they purchase your type of note?
Some note buyers specialize in performing notes. While others solely focus on non-performing (defaulted) mortgage notes. Other companies do both.
Before getting too far into the deal, make sure your note buyer has experience purchasing notes that are similar to your own.
You don’t want to waste your time only to find that you are with the wrong type of buyer who either ends up giving you a poor price or even worse — not closing the deal at all.
5. Are They Helpful?
It’s important to ask questions (frequently) whenever you are in doubt.
What’s more, a trustworthy note buyer will answer them, frequently and without hesitation. You should never feel out of line when asking your note buyer for explanations about the process.
Consider a few factors like the following before signing a deal:
- Do they take the time to explain the entire process?
- Did they outline all the indicators that help determine your mortgage note’s value?
- Are they easy to reach and get a hold of?
- Do they have a professional website with online resources including a FAQs page?
6. Fair Market Value Offer
While getting a fair market value offer can’t be done without seeing the mortgage note and supporting docs, once you do get a final offer it should be accurate and fair.
With so many factors that go into determining a mortgage note’s value, it’s easy to get lost.
If you know all the factors and feel comfortable determining the validity of an offer — great!
But, you may be the exception.
For those of not familiar with the note industry and determining values, you have a couple of options:
- Hire a real estate attorney or financial advisor
- Receive and compare multiple bids from note buying companies
- Research similar seller financed notes and properties in your neighborhood
7. Follow Your Gut
When you know, you know.
A great note buyer will make sure you understand and feel comfortable during the entire process.
Finding a note buyer that understands the “people skills” required in the note industry helps the transaction stay stress-free for all parties involved in the sale.
At the end of the day, finding a note buyer you can trust makes all the difference.