| |
| |
|
Real Estate Information |
|
|
|
Should You Accept A Full Purchase Offer For Your Note or Not?
You could be facing a dilemma when considering payout options on selling your mortgage note! To accept a full purchase offer or a partial purchase offer is not always an easy decision. Sure, to take the full purchase option is an easy decision to make if you're holding a second position note on a property that doesn't have any equity after you add the first and second mortgages, but what if that's not your situation? Full purchase payouts can be good if your primary concern is to just get out of the note and be done with it. But if getting top dollar for your note is your main concern, a full purchase sale may not be the thing to do. Before I get too far into this, perhaps you, the reader, would be better served by a brief revisiting of the different payout options and what they entail. Agreed? The 5 most common ways note purchase transactions are structured: 1. Full Purchase. This is when a note investor buys the entire note. The note seller is no longer responsible for collecting payments and is 100% free of ownership of and responsibility for the note. 2. Straight Partial. Here, a note investor purchases a predetermined number of payments in order to meet the seller's cash requirements. After the last of the predetermined payments, the balance on the note reverts back to the seller. 3. Reverse Partial. The seller, in this scenario, gets a lump sum and continues to receive the full payment amount for a specified and agreed upon period of time. This kind of arrangement is most fitting when the seller needs a large amount of cash at the closing but still wants to receive the monthly payments for a while. 4. Split Payment. This is when the investor purchases half of the seller's monthly payment and the seller continues to receive income from the other half. 5. Balloon Only. The note investor, in this case, only purchases the balloon due at the predetermined date on the promissory note. This option works when the seller needs some cash at closing but doesn't want to wait 30 years to collect the balance. Now, let's use this hypothetical situation: Mr. Jones holds a note on a property with a balance of $103,865.68. It is amortized over a period of 360 months (30 years), 10% interest with a monthly payment of $943.83. Now Mr. Jones gets an offer of $87,613 for the note on a full purchase option and is very disappointed. He objects to this offer. So then the note investor offers Mr. Jones $73,165.82 for a partial purchase of the note where the investor buys 150 of the 300 payments remaining on the note. Mr. Jones is pleased with this offer because he got a better price for selling only half of the note. Do you see that? In the full purchase offer, half would only be a little over $43,000 using the full purchase offer of $87,613. Mr. Jones got a much better deal this way and he is still the owner of the 150 remaining payments due to him from the note. So, as you can see, deciding whether to accept a full purchase offer over a partial purchase offer is not always an easy decision to make if getting the most money for your note is your primary concern. Frederick Webb is a Certified Cash Flow Consultant and is President & Co-Founder of Webb Funding Group, a small debt brokerage agency he runs with his wife, Kashita Webb. Visit http://www.mortgagenotecash.com today!
MORE RESOURCES:
Real-Estate - Google News |
|
|
|
RELATED ARTICLES
First-time Home Buyers - 100% Home Loans There is an increasing trend in South Africa that is seeing youths entering property market at a much earlier age. These youths are mostly first-time home buyers, applying for their first home loan, who have been renting for a short while and feel the need to invest in a property of their own. Looking into Buying Mobile Homes? To own a home is one of the dreams every common man cherishes, even from the childhood. With hard work and years of savings, he might be able to build or buy a dwelling for him and his family. Selling Your Home: The Power of a Great Sales Flyer Even though its importance is often overlooked, a great sales flyer is one of the most effective tools for selling your house. Whether your home is listed with an agent or not, make sure that you have a dazzling flyer. Real Estate Investing - Maximum Leveraging of Your Money At this moment, you have access to some amount of money, from the extremes of only pocket change to the reserves of Bill Gates or Warren Buffet.Suppose you want to invest your funds into some vehicle that will multiply the return. Secrets of Making Money from Real Estate - Part 1 There are three investment vehicles which can make you rich. Stocks, businesses, and real estate. First Impressions Will Sell Property Fast! First impressions count, buyers will have already formed an impression before they step into your property. A well-kept garden, pathway and fence, plus a freshly painted front door are immediately appealing, whereas a scruffy outdoor space with a litter bin outside the front door may turn many prospective buyers away. Housing Bubbles and You Are we in a housing bubble? To answer that question first we need to understand what a housing bubble actually is. A housing bubble is what happens when the there is a significant rise in the market that is mostly due to the expectation that the prices will continue to rise. Listing Real Estate Online - Top Tactics for Boosting Sales Listing real estate online can be a great way to let buyers know what is out there and it gives sellers a chance to show their home to people all over the world. However, the problem lies in the fact that most people still want to tour the home, inside and out, before buying it. A $100,000+ Discount On Miami Condos By this point and time, many people have heard about buying preconstruction condos and some of the amazing profits that have been generated by these investments. What many people don't understand is that there is another way to play the preconstruction investing game, especially for those investors with solid financial resources. High Tension for the Buyer and Seller of Real Estate Can Be Reduced Tensions can run high in both the selling and buying of real estate. After all, there is a lot of money and emotion involved! There are also time pressures and numerous privacy issues to deal with. What are the Top 11.5 Criteria for Selecting an Orlando Investment Property 1. Make sure units are larger than 1800 square feet. How to Choose the Proper Entity for Your Business First, let me state that I'm not an attorney and the rest of this article is just based on my experiences so I'd advise you to contact John Hyre at www.realestatetaxlaw. 10 Easy but Essential Steps for Home Selling Success They say that the whole process of selling up, buying new and moving on is one of the most stressful series of events any of us goes through in a lifetime: and yet with careful planning, attention to detail and a clear focus, the whole process can be relatively stress free.While there will always be factors outside the control of any home seller, those factors that fall within their control sphere can proceed fluidly and smoothly when they take the time to plan and think one step ahead. How to Make a Buyer Fall in Love with Your Home If you are thinking of selling your home, there are a number of things you can do to improve the "showability" of your home. But first, let's look at your home through the eyes of the buyer. Hey Landlord! Is Your Lease Legal? The longer you are a landlord the more you strive to create the perfect lease/rental agreement. Landlords learn in the school of hard-knocks that some tenants are certified trouble makers and we try our best to protect ourselves with a carefully structured restrictive lease. Should You Accept A Full Purchase Offer For Your Note or Not? You could be facing a dilemma when considering payout options on selling your mortgage note! To accept a full purchase offer or a partial purchase offer is not always an easy decision.Sure, to take the full purchase option is an easy decision to make if you're holding a second position note on a property that doesn't have any equity after you add the first and second mortgages, but what if that's not your situation? Full purchase payouts can be good if your primary concern is to just get out of the note and be done with it. Selling Your Own Home - Pet Issues If you are selling you own home, you need to consider the effect of pets. People who are working with a real estate broker are sure to get coached about the potential negative effect of pets. Top Ten Suggestions for Selecting a Real Estate Agent In order to find a real estate broker or agent who meets your needs and makes your buying or selling experience a positive one, Century 21 Real Estate Corporation recommends you:DO NOT blindly walk into or call a neighborhood firm and ask for an agent at random.Ask friends and family for recommendations. Important Facts For Home Buyers If you are considering buying a home or have spent many years saving in preparation of buying a home, the questions and process involved in buying a home can be extremely stressful. As exciting as it is to begin looking for your new home, there are many unexpected costs and details to be considered before contacting a real estate agent. Real Estate Investing In Belize Any trip to Belize starts fantasies of owning a beach villa, or a jungle resort. There are a lot of North Americans in this English speaking, former English colony.
|
 Home  Contact
|
| Real Estate Information © 2006 |
