Get more than one, and stop when the prices start to cluster. One offer tells you what one buyer wants to pay, while a few offers built on the same facts tell you what the note is worth. Where a buyer will quote a partial, have that price in front of you as well.
Why a single offer says so little
A note has no listed price. Each buyer decides the return they want on the money they pay you and works backwards to a price. That is why note offers differ from buyer to buyer: they want different returns, judge risk differently, have different amounts of cash to place and prefer different kinds of notes. One offer alone cannot tell you whether it is high, low or fair.
How to tell when you have enough
No fixed number applies, so read what the offers are telling you.
| What you see | What it means | What to do |
|---|---|---|
| One offer | Nothing to compare it with | Get more before deciding |
| Two offers far apart | The buyers are pricing different things, or one is off | Check they used the same facts, then get another |
| Several offers close together | You have found the range for this note | Choose on terms and trust |
| No offers, or all very low | Something in the file worries buyers | Ask what it is before you look further |
As an example with round figures, offers of $84,000 and $85,500 on the same facts are $1,500 apart, and a third bid is unlikely to land far from them. Offers of $70,000 and $85,000 are $15,000 apart, which suggests the two buyers were pricing different things. Once prices sit close together, the differences that matter move to the terms.
Give every buyer the same facts
Five quotes built on five different descriptions of your note are less use than two built on the same one. Write the facts down once and send every buyer the identical set:
- balance, monthly payment, interest rate and payments left
- any balloon, with its amount and date
- the property and your lien position, meaning where your claim ranks against the property if it has to be sold to repay debts
- the payment record, including any late payments
Then compare the offers on your note on more than price: what each is conditional on, what costs come out before the money reaches you, and who is funding it. A higher quote with vague conditions can end up paying less than a lower one that survives the buyer’s checks.
Compare structures as well as buyers
Several prices for the whole note compare buyers with each other and leave a different question unasked, which is whether you need to sell the whole note at all. A partial is the sale of a set number of payments, with the note returning to you afterwards. It raises less cash today than a full sale and leaves you the later payments. If the smaller sum covers what you need, the gap between a partial and a full note sale can matter more to you than the gap between any two full-sale bids. Buyers do not all write partials, and a note with few payments left or a weak record may not draw one.
When more enquiries stop helping
Each extra buyer costs you time, because every one wants the same documents and asks questions of their own. It can cost your payer some patience too. Buyers check the payer’s credit and may contact them, and several doing so at once can unsettle someone who has done nothing wrong.
There is also less competition behind a long list of names than it appears. Some of the people you contact will be brokers taking your note to the same few buyers, so ten enquiries can turn out to be three real bids. That is the practical case for using one broker, who sends a single set of facts to several buyers and brings the replies back in one format. If you would sooner do the asking yourself, make it part of finding a note buyer to ask each one whether they fund the purchase or pass it on, so that you can count the real bids.
If you already hold one offer
Keep it, and ask its sender which balance, rate and payment count they used. Those figures are where judging whether a single offer on your note is fair begins, and they let a second price be built on the same facts. For that second price you can send us the same details and tell us what the first buyer assumed. If the first offer carries an expiry date, mention that too. Asking for another price belongs to the first stage of selling a note, before any agreement is signed.
Related questions
Is the highest offer always the one to take?
No. Look at what it is conditional on, what costs come out, and who is funding it. A slightly lower offer that survives the buyer's checks can pay you more than a high quote that is later reduced.
Will asking several buyers hurt my payer's credit?
Buyers do review the payer's credit as part of pricing. How a particular check is recorded depends on the type of check, so ask each buyer what they run and when. Fewer, well-chosen buyers keeps this to a minimum.
Do I have to tell buyers I am getting other offers?
You do not have to, but there is no harm in it. A buyer who knows others are pricing the same note has a reason to lead with their best figure.