A note offer drops either because the buyer’s checks found that the note differs from what the quote assumed, or because the first number was never meant to hold. A genuine finding can be shown to you on paper, and asking to see it is how you tell the two apart.
What a first offer rests on
A quote is priced from what you tell the buyer: the balance, the payment, the rate, the payer’s record and a rough property value. The title report, the payer’s credit and a valuation come later, during due diligence, the review a buyer completes before funding. Until then the quote rests on assumptions. Where the checks confirm them the price should stand, and where they do not the buyer reprices.
Findings that fairly lower a price
| What the buyer found | Why it moves the price |
|---|---|
| The balance is lower than stated | There are fewer dollars to buy. |
| Late or missed payments in the record | The buyer sees more risk and wants a higher return on their money. |
| The property is worth less than assumed | Less equity protects the buyer if the payer defaults. |
| A title problem | Unpaid property taxes, another lien ahead of yours, or a gap in the chain of ownership puts the buyer’s claim in doubt. |
| Weak payer credit | The chance of missed payments later is higher. |
| Missing or flawed documents | A lost original or an unrecorded document adds legal risk. |
| No insurance on the property | A fire or storm could leave the debt with little behind it. |
Each row is a fact someone can put in front of you, because it comes out of what a buyer checks before funding: a title report, a valuation, a credit report, the payment record.
A fair repricing on paper
Suppose the valuation comes in well below the figure the quote assumed. Less equity now stands behind the note, so the buyer wants a higher return, and a higher yield on the same stream of payments means a lower price.
A buyer acting fairly can hand you the original note pricing worksheet and a revised one. The only lines that differ should be the fact that changed and the yield that follows from it. With the balance, the payments and the costs identical on both, you can read off what the finding cost you.
Signs the drop is a tactic
- The cut arrives days before closing, after weeks in which nothing was said.
- The reason is general: “market conditions”, “our funding partner”, “underwriting”.
- No report, valuation or document is offered to support it.
- You are told the new number is good for a very short time.
- The first quote was well above every other offer you received.
The pattern is known as bait and switch: quote high to win the deal, then cut once the seller has stopped talking to anyone else. It is the delayed form of a lowball note offer, with the low number arriving late instead of first.
What to ask for when it happens
- Ask in writing what changed, and for the report, valuation or document behind that one finding.
- Ask for both worksheets and compare them line by line.
- Check the finding yourself. A balance can be recalculated from the payment record, and a title issue can sometimes be cured, for example by paying overdue property taxes.
- Read your purchase agreement to see whether a price change lets you walk away without owing the buyer’s costs.
- Tell the other buyers who quoted what was found, and ask whether their number changes. A real finding affects every buyer’s price, though not always by the same amount. If nobody else quoted, send us the note details together with the reason you were given, and we will price the note with that finding included.
Giving the next quote less room to fall
Hand buyers the awkward facts at the start: every late payment, any second lien, a missing document. A quote built on the true picture has less distance to fall. A price can still move at more than one point in the process of selling a note, so keep your other offers alive until the money arrives, and a late cut will not leave you with a single choice.
Related questions
Can a buyer lower the price after I accepted?
It depends on your purchase agreement. An agreement generally allows a price change when due diligence shows the note differs from what was described. Whether a particular cut is permitted is a question for an attorney reading your contract.
Should I accept a reduced offer?
Only once you have seen what changed and checked it. If the finding is real, other buyers will price it in too, so compare the reduced offer with your other offers and with keeping the note.
What is bait and switch in a note sale?
It is quoting a high price to win the deal, then cutting it shortly before closing when the seller has stopped talking to other buyers. A late cut with no document behind it is the sign to look for.