In order to make their home more attractive or to help close a deal, many home sellers offer financing to their buyers. Basically, they enable the buyers to make payments to them, rather than to a mortgage company. If you hold such a note, you may wonder if selling it is the right choice for your situation. Check out these reasons to sell your note.
1. You Mitigate the Risk of Holding the Note
One risk of holding the note is that the borrowers may default on the note. Though you can repossess the home if they default, this is a costly, time-consuming process.
By selling your note to a company that purchases notes, you relieve yourself of this risk. If the borrower decides to stop paying the note, it is no longer your problem to deal with.
2. You Can Get the Cash You Need Now
When you sell your home to borrowers with conventional financing, you receive the profits from the sell all at one time. When you offer owner financing, you get a little bit each month.
Achieve a higher level of cash liquidity by selling your note. This enables you to get all of your money at one time. You can use it to pay off debt, purchase another home, or just fund your savings account for a rainy day.
3. You No Longer Have to Service the Note
Many sellers find that in order to effectively service the note, they need to remain close to the property. If they do live a significant distance from the property, it is likely they need to make regular trips to tend to the note.
Obtain the freedom you desire by selling your note. You can now move anywhere you desire or travel for extended periods without having to worry about tending to your borrowers.
4. You Can Pursue Other Investment Opportunities
Some sellers decide to offer seller financing for investment purposes, as borrowers have to pay a stated rate of interest on the money that they borrow. However, you may learn about investment opportunities that have the potential for a higher rate of return than the interest you are currently receiving.
By selling your note, you have the cash to pursue other investment options so you can potentially earn a higher return on your money.
Seller financing can save a real estate deal that is about to go south. Relieve yourself of the work and risk associated with holding a note by selling it to a mortgage note buyer. By doing so, you open the door for travel, personal growth, and other financial opportunities.Share