If you own a promissory Note and you’re interested in selling it, you first have to make buyers aware (e.g. Faller Financial). But be prepared before you start sending emails and making phone calls.

Here are a few things to keep in mind:
1. Valuing the property. We, as buyers, want to know the best value. Not the potential value…the best value. And while some properties can be hard to value, don’t let that get in the way of being transparent. Disclose the challenges.

Here’s another thing that’s important to disclose: property damage. The only person who stands to suffer if a property with damages is overvalued is…(drum roll)…the seller. You! Most investors will sniff out damages and, if not disclosed, will kill the deal.

2. Know your taxes and liens. Most likely, if you’re interested in selling your Note, you know if there are delinquent or sold/forfeited taxes. You may not WANT to know the reality that there are delinquent or sold/forfeited taxes, but…you know.

The things you may not know, however, are:
– If the sold/forfeited taxes are redeemable; and
– If there are prior unreleased mortgage liens or municipal, city, or tax liens that need to be released.

Our recommendation is to dig! Learn as much as possible about your property’s taxes and liens before approaching a buyer.

3. Get your pay history in order. One of the biggest factors in valuing a Note sale, from a buyer’s perspective, is pay history. We want to know upfront: has the borrower ever struggled to stay current?

NOTE: A sure-fire way to kill a deal is to make it difficult for the buyer to obtain evidence of pay history.

4. Get collateral in order. You need to be able to say whether or not there are any gaps in the assignment. You also need to have the Title Policy, a lost note affidavit (if there is one), and the recording of the mortgage or Deed of Trust.

5. Be prepared for the closing. You’ve dotted your I’s and crossed your T’s and you’re ready to close with your buyer. Here are a few things to consider:

– Have you set reasonable expectations regarding the timing of the closing?
– Is an escrow closing required? If so, does that closing line up well with the Note sale closing?
– Are there any challenges with the Mortgage Loan Purchase Agreement (MLPA)?
– Does the buyer have any funding issues?

The last bullet point is a biggie. Don’t hesitate to kindly confirm your understanding of the funding timeline…like, multiple times, if necessary. Reputable firms (like Faller Financial) have the funds ready to transfer; less-than-reputable firms may get into a deal without the necessary funds ready to roll. Listen carefully and trust your gut…if something doesn’t feel right, speak up.

Get ready!

Stay tuned for more tips, and learn more in general about Faller Financial and Notes at fallerfinancial.com/note-resources.

Call 844-433-6683 or email info@fallerfinancial.com to sell your promissory Note, or request a consultation at fallerfinancial.com/contact.

Photo by Juan Carlos Becerra on Unsplash

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