If you’ve sold a home on land contract, you might find yourself one day looking for buyers of land contracts. That day has arrived. You are now carrying the note and receiving payments on it, but due to the changing circumstances of life, you now want to sell your note to a buyer land contract.
The reason you want to sell doesn’t matter. The bottomline is you need or want to raise some cash now. It could be a medical emergency, unanticipated bills, a business endeavor, not wanting to deal with the paperwork and headaches of collecting payments on the land contract, stress from living with the knowledge that the person making payments on the land contract may default, or any number of things.
The good news is there are buyers of land contracts — professional note buyers — who will consider purchasing your note for a lump sum of cash.
Maybe you want to sell the entire land contract note and be done with it or maybe you need less money and want to sell only a portion of the note and hold the rest for cash flow.
It doesn’t matter. A competent note buyer will consider either situation.
Buyer Land Contract: Factors To Understand
A land contract, also called contract for deed, is not unlike a typical mortgage in that the note holder receives payments in installments at a certain interest rate. There is no bank involved because, of course, you in essence became the bank by selling your home on land contract by offering seller financing.
Because payments are made over time, buyers of land contracts will need to purchase your note at a discount if they are to assume the risk of default from the person making payments on the land contract.
Also, due to the fact that money today is always worth more than money tomorrow because of inflation, a discounted price on your note is imperative if you want to have a chance of selling your land contract to a buyer.
If your note has generated a steady history of payments, you should be able to get more for your land contract sale because the risks of default may be smaller.
However, many people want to find buyers of land contracts as soon as the note seasons. There is nothing wrong with this, but just keep in mind that more of a discount will probably be required. » Read more: Buyers Of Land Contracts Can Purchase Your Note For Immediate Cash Now