As the housing market continues to rebound, buyers of seller carryback notes are loosening the purse strings a little bit. Offers to buy quality notes are higher than they have been in several years.
The National Association of Home Builders tracks the nation’s metropolitan housing markets. If a market shows increases in housing permits, employment and home prices for at least 6 months, they label the market improving. On July 8, 2013, the Association reported that 255 markets are improving, representing more than 70% of the areas they track. The number of improving markets has more than tripled since July 2012, they report. “The relative stability of the index is representative of the broad recovery underway, which is much more extensive than what we were looking at one year ago,” Chairman Rick Judson said.
This is reflected in the prices some sellers are receiving for their seller carryback notes. With increased equity in properties comes less perceived risk for the buyer. Given good seasoning and reasonable credit, sellers are reaping the benefits, some receiving into the mid 80% and higher on their unpaid balances.
If you are holding a note and find yourself with a need for cash, your note may be a good source for that cash. You may want to consider the pricing options available for your note and compare that to your other cash sources before making a final decision.
Feel free to contact me if you would like to talk about your particular situation.
