Seller financing is a powerful tool for property owners looking to close deals quickly, especially when buyers struggle to qualify for traditional loans. However, when it comes time to sell the promissory note, several key factors determine its resale value. At Quickity Closers, we help noteholders understand these variables to get the best possible return.
1. Buyer’s Down Payment and Its Impact on Note Value
A larger down payment reduces lender risk and increases the note’s marketability. For example, a $10,000 down payment on a $100,000 property gives the lender a cushion if the market declines.
- Bigger down payments signal borrower commitment
- Cash down payments are preferred over rent credits or repair reimbursements
- “Cash is king” when it comes to note valuation
2. Loan-to-Value Ratio (LTV) and Equity Protection
The loan-to-value ratio compares the loan amount to the property’s appraised value. A lower LTV means the lender has more equity protection.
- Lower LTV improves foreclosure recovery potential
- Payments and property appreciation increase borrower equity
- Home appreciation trends affect long-term note value
3. Borrower’s Credit History and Payment Behavior
A borrower’s credit score and payment history are critical indicators of risk.
- Fewer debts and consistent payments are favorable
- Patterns like “rolling 30s” or seasonal late payments reduce note appeal
- Lenders prefer borrowers with clean financial records
4. Documentation of Loan Payments
Proper documentation builds trust and supports due diligence. Whether payments are made via a loan servicer or directly to the seller, records matter.
- Use third-party servicers or maintain verified payment records
- Include dates, amounts, and breakdowns for each payment
- Transparency increases buyer confidence
5. Interest Rate and Market Alignment
The interest rate stated in the promissory note should align with current mortgage trends.
- Competitive rates make notes more attractive
- Higher rates may increase returns but could deter buyers
- Consider market benchmarks when setting terms
6. Property Location and Condition
The property securing the note plays a major role in resale value. If the borrower defaults, the lender must rely on the property’s resale potential.
- Desirable locations improve note liquidity
- Poor condition or proximity to industrial zones can reduce value
- Zillow research shows how location affects pricing
Why Choose Quickity Closers?
At Quickity Closers, we specialize in helping sellers get top dollar for their notes. We evaluate every factor—from down payments to documentation—to ensure you receive a fair and accurate quote.
📞 Call us today at 1-855-784-2511 for a free, no-obligation valuation of your seller-financed note
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