Posted by Ed on July 29, 2002 at 10:32:40:
In Reply to: Note seller question - Experts, please help posted by Lori on July 24, 2002 at 14:22:55:
yes. unless you have an unusually high interest rate and short length (with a balloon payment)Its too bad someone didn't explain it better before you did it. Its like a credit card in reverse. They came to you for a cash advance on the "HOME EQUITY" credit card. But you don't want to wait and collect the monthly payments. So becuase the money 10 years from now will be inflated dollars ($100 today may be $85 in ten years) most everyone discounts the 'future' face amount of the note to pay you cash. If you can take payments for 3-6 months from the buyeer and his credit rating is fairly good (you had your lawyer or someone run a credit check right?) then you should get more cash for your note in 4-7 months "longer the better"- called a seasoned note. If your selling with no payment history you're giving up maybe another 1-3% in cash discount. Its all about how much risk to the note buyer. Used car dealers sell the car loans the same way. They get us to sign for a 5000 dollar loan and then turn around and they sell it for cash lets say 4000 dollars, but they knew that when selling the car. sell at the top if not higher price and then you get the cash you really need after the loan/note is sold