I Have a Note for Sale – What Will You Pay?
This is a recent email I received:
“I have a note for sale, the details are as follows:
1) Note is in Detroit Michigan
2) It is a single family home
3) note is 37,000
4) on time payer but credit score is 575
5) looking for 24,000
6) this is a first position note
7) down payment of 500.00 at purchase
Please get back to me with offer or to request more information. Thank you and have a great day.”
This is a great start, but doesn’t really give me what I need.
The best way for me to get you the most accurate quote on your note is to have these documents in front of me:
- the note
- the deed or mortgage
- escrow instructions and/or
- escrow closing statement
My fax # is: (626)451-0454
These documents help me understand exactly what you have for sale. Many people have a hard time filling out the note summary accurately, so it’s very important for me to see the documents. But if you feel capable, by all means, fill it out and email or fax it to me.
Just know that if you inadvertently misrepresent the information, or fail to provide any information requested, the final “real” quote is likely to change at the closing table.
Now, just for fun, let’s look at the surface of this note. What are the main challenges?
- low down payment ($500 – is that 1% down? 10% is usually minimum)
- poor credit score (575 . . . ouch; we usually need to see 620+)
I doubt very much that anyone can pay $24,000 for this note with the two challenges combined. If someone has poor credit, but put down a large down payment, that helps. If someone put down a small down payment, but has great credit, we can still work with that, generally.
For more information on selling a note and how notes are discounted, read: