Sometimes after a homeowner sells his home, he or she will look for a land contract buyout in the future. Circumstances change and a seller who created a land contract real estate note will often not want to deal with it any longer.
There are many reasons why someone would legitimately want to sell their land contract note.
Some of the more common ones include: not wanting to deal with the paperwork hassles anymore; not wanting to live with the risk of the payor defaulting on the note; needing a lump sum of cash now to fund something, whether it be a business venture, medical emergency, putting a child through college, and so on.
If you have sold property on a land contract and now want a land contract buyout of your note, you'll be pleased to know that there are professional note buyers who will make you an offer if they deem your note potentially profitable.
A land contract is sometimes also referred to as "contract for deed."
Land contracts give the buyer ownership of the property because the buyer receives equitable title. Like a mortgage, payments on a land contract are made in installments, not all at once.
If you are interested in a land contract buyout, therefore, you will in essence be selling the income stream you are deriving from the note.
Certain states are land contract friendly and others aren't. One of the most land contract friendly states is Michigan, where a significant portion of houses sold are via land contract.
How much you can get for your land contract note will depend on numerous factors, and a general answer cannot be given. It will depend on your individual note if you want a land contract buyout. Speaking with a knowledgeable, competent note buyer is the only way to find out how much cash you can receive for your note.
Keep in mind, however, that your entire note need not be sold. You could sell it off wholly, or you could sell a portion of the income stream to raise cash now and retain the rest of the note for future income. In short, there is a great deal of flexibility.
However, because inflation always erodes the purchasing power of the dollar, a note buyer is going to need to buy your note at a discount to make it worth their while. Also, a land contract buyout means that the note buyer will be assuming the risk of the payor of the note defaulting. Because the note buyer takes over that risk, a discount is required for a purchase of your note.
The only question is how much of a discount will be needed to make a sale possible for you.
A professional note buyer should be willing to discuss your note with you over the telephone for a free, no obligation consultation. If anyone attempts to charge you just to discuss the possibility of a land contract buyout for your note, then that is someone you should not do business with.
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