The answer to this question is – it depends!
Over the past few years, our closed transactions garnered the seller anywhere from 60% to 90% of the note’s principal balance. That is a big disparity, right? Contrary to what many people think, there is no standard discount. Yes, note buyers are looking for a certain yield or return over the life of the note. But the pricing comes down to a whole bunch of factors – here are some of the key ones:
- Type, condition and location of the property
- Amount of down payment
- Credit worthiness of your buyer
- Note interest rate
- Length or term of the note
- Number of payments made
- Number of payments missed
- Owner occupied or a rental
So, it depends how strong or weak these factors are – the pricing will follow accordingly.
Call me if you would like an assessment of your note.