Deed of Trust, Land Contract, Promissory Note, Trust Deed, Contract for Deed and Mortgage Note Buyers
Deed of Trust, Land Contract, Contract for Deed and Mortgage Note Buyer
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TriMark Capital Funding, Inc. Is a National Buyer of Discounted Mortgage Notes and Deeds of Trust

Owner Financing Homes
TCF is a nationally recognized investor for residential real estate notes, trust deeds & commercial mortgage notes.

America's Mortgage Buyer
Owner Financing Homes or Commercial Property for Maximum Safety & Return

"The Devil is in the Details" is true enough when you're talking about seller carry back financing, so make sure you manage the details.

Seller Financing a House
Here are some important tips:

Sale Price
The sale price should be nothing less than the fair market value of the property. You are taking on a substantial amount of risk with seller financing, so there is no reason to discount the price too. Don’t allow the sale price to be negotiated below market value, and then have the buyer ask you for owner financing too.

Down Payment
The down payment is the purchaser’s initial investment in, and commitment to, the property. The larger the down payment, the more motivated the purchaser will be to protect his investment by making his payments on time and staying out of foreclosure. If there is not a MINIMUM of 10% cash down (not a seller carry back 2nd) or other non-cash alternative, you will likely be unable to sell the note. Plus with property values declining so rapidly, the buyer make find themselves "underwater" and simply trash the house and walk away. A large down payment acts as a safety net to prevent that.

Interest Rate
The interest rate you charge should be a function of the down payment, credit worthiness of the buyer and number of scheduled payments. It should also be a function of current market rates plus at least an extra 1% to 2% or more. Remember, the banks only advertise their best rates, and the buyer didn't qualify for them or he would have gone there for the loan. Don’t be afraid to require at least 1% to 2% higher than local banks are charging. It will help offset any discount on the note sale.

Credit Worthiness
Banks are professional lenders. They would never lend money without fully reviewing a credit report and other financial information on the borrower and you shouldn’t either. Just like any creditor, you have the right to information that shows the buyer has an adequate source of income to pay the note obligation and has a good history of paying his bills on time and fulfilling his financial obligations. It is also helpful to see if a person has any public records such as arrest records - this can tell a lot about a person's character. If selling to a person with less than excellent credit, insist on a larger down payment and higher interest. If in doubt, call several local banks and ask what they would charge under similar circumstances - then raise it from there.

The amortization of a note refers to how many payments are scheduled. The best advice here is to structure an exit strategy so you can be out of the note in a relatively short period of time, unless you're seller financing strictly for investment returns and long term income.

Escrow Payments
Banks require monthly escrow payments for taxes and insurance and it's a good idea that you do the same.

Title Insurance
As the lender in seller financing, you should require the purchaser / borrower to provide you with a lender’s policy of title insurance. Every bank requires this. If you ever decide to sell your note you will need this policy of title insurance. Requiring the buyer to purchase the policy will save you the expense down the road.

Closing the Sale

It is very important that you have a competent attorney or title company represent your interests in the creation of documents and at the closing. As the seller, the financing documents protect your interests. Your attorney should prepare these documents. After the closing, be sure your new mortgage, deed of trust, contract for deed or land contract is recorded immediately to further protect your interests.
TriMark Capital Funding, Inc.: Your Money, Right When You Need it.

Back to Real Estate Notes

Owner Finance Homes

Mortgage Note Buyers Since 2003

TriMark Capital Funding, Inc. is a nationwide residential and commercial mortgage note buyer. Our perspective on seller financed real estate transactions is somewhat unique, inasmuch as we have the opportunity to examine and dissect transactions, almost forensically, after they have been created. We dig into each deal to find the good, the bad and sometimes, the ugly.

For most people, buying and selling real estate is an emotional event, much more so for some, less for others, and herein lies the first problem. The property itself can generate emotions and memories which can adversely affect the judgment, motivation and decision making capabilities of the seller. Emotions, historically speaking, combined with a lack of financial intelligence, cause people to owner finance many deals that they would have been far better off walking away from.

As an investor, we have the advantage of evaluating property, notes and financial transactions analytically, without emotions clouding or distorting the issues. If you are contemplating the idea of providing owner financing or seller carry back financing for a property you intend to sell, you would do well to heed the advice on this page. If you do, you will avoid all of the most common and costly mistakes people tend to make. You will also understand how to create a note that not only has present value, but one that will retain it's value over time.

We Only Buy Done Deals - We Don't Create Them
First and foremost, as a professional note investor, we do not get involved in any aspect of the real estate transaction wherein the note and mortgage or deed of trust is created. All of our transactions are conducted "at arm's length". In other words, we don't assist or advise in creating the note, negotiating the deal, or any of the closing work.

We do not participate in "simultaneous closings" or "table closings" where the real estate transaction and the note sale are negotiated simultaneously and closings for both transactions occur at the same or similar time. We also strongly encourage you to avoid them as well, due to questionable ethical and legality issues.

Therefore, to avoid any appearance of impropriety, we will only evaluate and consider a note for purchase after the property has been sold, the note has been created and recorded and after the ink has dried, so to speak. There also needs to have been at least one, and preferably two or three payments made by the new property owner.

Guidelines For Offering Seller Financing
Offering owner financing to potential buyers is a more powerful marketing tool now than ever before.

Offering owner financing will help you sell your property, but doing business with the wrong borrower(s) could potentially lead to larger problems for you than the unsold property was causing.

Knowing how to successfully use owner financing is extremely important. Learning these guidelines will limit whom you offer owner financing to, help you sell your note if you desire to do so and hopefully, reduce the chance of facing a foreclosure situation down the road.

The best advice for creating a note is to create it so that it will always be a good deal for you, even if you don't or can't sell it. And NEVER, EVER create a note or knowingly enter a transaction where you will HAVE to sell the note in order to get out from under a bad deal.

Cardinal Rule #1 - Know Thy Buyer
Banks have a lengthy mortgage application process and you would do well to copy certain aspects of it since you will effectively "become the bank" by owner financing a transaction.

1. Have any potential buyers complete a standard 1003 mortgage application. This is the Uniform Residential Loan Application Fannie Mae Form 1003. It is the industry standard and it will give you loads of insight on your potential buyer including income, assets, banking info, liabilities, employment history, etc. You would also be well advised to verify some of the key information before finalizing your transaction.

2. Require any potential buyers to provide you with a current tri-merge credit report and credit scores on them and their spouse. They can order them here if they want to and by ordering it themselves, it will not lower their credit score like it does if a company pulls it. Financing a borrower without knowing what's on their credit report is one of the most common, and most costly, mistakes people make in seller financing. They are asking you to finance them with a very large loan over a long period of time so it is the reasonable and prudent thing to do. It is foolish and irresponsible not to know. You should insist on this no matter what they tell you and irregardless of the amount of the down payment. It will also prove useful during negotiations of price, interest rates and so forth.

A general guideline for credit score is that you should require any buyer to have a minimum credit mid-score of 650 to 680. Any lower than 650 is heading towards poor credit and indicates that you will likely experience late pay problems and possibly foreclosure later on. Do not make the mistake of owner financing a buyer who has a poor credit history and cannot make a substantial down payment. This has always been a bad combination for lenders and it is especially true today. Plus a low credit score is one of the most common reasons for note buyers like TCF declining a note.

3. Always insist on a large cash down payment. This is the buyer's only up front financial commitment to you and the property, so from a lender's perspective, the larger the down payment, the better. A good general rule of thumb is 20%. That also happens to be most bank's cutoff point for requiring mortgage insurance.

4. Charge a realistic interest rate that reflects the risk you are taking on. If the buyer wants a 6% rate, have them go to a bank. You are considering owner financing because they could not qualify for a bank loan so bank rates are irrelevant. A rate of 8% to 10% should be sufficient to offset much of the discount required to sell the note.

5. Have an exit strategy. Do a 5 year interest-only balloon, or 7 years maximum. The discount required to purchase a 30 year note, particularly one with a low interest rate, is normally very steep and you will lose a lot of your money because of the long term.

6. Don't cut corners on paperwork. As previously stated, hire the services of a competent real estate attorney to represent your interests in the transaction and a title company handle the paperwork for you so you don't miss any steps.

If you follow these guidelines you will have created a valuable, high-quality asset and you will have the option of selling the new mortgage loan you created within just a few months of the closing. If you really desired cash from the sale you can still get it by selling the loan to a note buyer like TCF. Failing to follow these guidelines may result in you creating a note that will have to be deeply discounted in order to make it attractive enough for someone to buy it, or worse yet, one that is not marketable at all and you end up being stuck with it for the term of the note - or possibly much longer.

Owner financing is a sensible way to sell property and extremely common all over the United States. (It has been estimated that approximately 10% to 15% of property sold is now sold with seller financing.) Offering to finance the purchaser of your property can help you sell it quickly, may provide tax benefits and will give you a nice source of monthly income.

Advantages for the Seller

  The number of potential buyers will increase significantly.
The sale price should not have to be reduced below market value.
You may be able to earn extra income by charging higher rates of interest.
The sale will close more quickly than with bank financing.
Any potential income tax liability from the sale may be able to be deferred.

In most cases, the note you create can be sold and converted into cash at almost any time.

Advantages for the Buyer
  The buyer will not have to meet rigid bank qualifying standards.
The buyer may be able to purchase a property the banks would not qualify him for.
The buyer will pay lower closing costs.
The buyer may be able to make a smaller down payment than the banks would require.
The buyer may have the option of creating flexible payment terms.
The buyer won’t have to pay origination points or mortgage insurance.
The buyer may not have to establish a prepaid escrow account for taxes and insurance.

Call the Mortgage Note Buyers Today

What Next?

Request your free quote or call us at 1-877-WECANBUY right now and let's talk.

We'll answer your questions, explore your different options with you and explain the process. Whatever you choose, know that TCF is committed to paying you the highest cash price for your owner financed mortgage note, real estate note, trust deed or land contract with no risk, no hassle, no runaround and no closing costs either.

Mortgage Buyers Question

TriMark Capital Funding, Inc. pays the highest cash price for your seller-financed land contract or contract for deed.

Call us at 1-877-932-2628 or request your free no-obligation quote now.

TriMark Capital Funding, Inc.: Your Money, Right When You Need it.

PLEASE ... No Note Brokers, Flips or Mobile Home Notes Without Land - NO EXCEPTIONS

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