As long as it takes to gather the documents and check them. Wiring the money is the quick part. A clean note with a complete file and clear title closes well ahead of one with a missing original, a stale payment record or a title problem, so a firm number quoted before anyone has seen the file is a guess.
From accepted offer to funded
The sequence below applies to any purchase, and it is the time spent in each stage that differs from one note to the next.
| Stage | What happens | What sets the pace |
|---|---|---|
| 1. Offer accepted | You and the seller agree a price, subject to due diligence | How quickly both sides sign |
| 2. Document review | You read the note, the security instrument, the assignments and the payment history | Whether the seller can find everything |
| 3. Title | A title company or attorney searches the property records for liens, unpaid taxes and breaks in ownership | The county, the provider and what the search turns up |
| 4. Property value | An agent’s opinion or an appraisal confirms what the property is worth | Location and access to the property |
| 5. Payer checks | The balance and payment record are confirmed, in writing with the payer where that can be arranged | How soon the payer or servicer responds |
| 6. Closing documents | The sale agreement, the endorsement of the note and the assignment are prepared and signed | Attorney and seller availability |
| 7. Funding and recording | Money is released by whoever the agreement names to hold it, and the assignment is sent for recording | Delivery of the original documents |
Where the time goes
Paper causes the longest waits. A missing original note has to be found or replaced with a lost note affidavit, a sworn statement that the original cannot be located, and some buyers will not accept one. A seller who collected payments by hand may have to prove the history from bank statements, one month at a time. If the note has changed hands before, every earlier transfer needs its own assignment in the file.
Title comes next. An older mortgage that was paid but never released, unpaid property taxes or a recording error all have to be cleared before you fund.
The rest is people. An estate or a divorce can mean the seller needs court authority or a second signature, and the balance cannot be confirmed until the payer or the servicer answers.
When an IRA is the buyer
A self-directed IRA buys through its custodian, which signs and sends the funds in your place, as it does at every step of buying notes in a self-directed IRA. The custodian has its own forms and reviews the documents on its own schedule, so ask how long that review takes before you agree a closing date with a seller.
If a custodian is involved, say so when you join the buyer list, along with how you fund, and the seller can be told what to expect from the first conversation.
The parts you control
- Be ready before you bid, with funds available, the entity or account set up, and an attorney and a title provider chosen.
- Send the seller one list of everything you need as soon as the offer is accepted. Our due diligence checklist for note buyers is a starting point.
- Order title and the valuation together, since neither depends on the other.
- Read each document when it arrives. A problem found early leaves time to fix it, and the same problem found on closing day delays the closing or ends it.
- Settle the handover to whoever will service the note early: who collects after closing and when the payer is told.
Keeping the checks when the seller is in a hurry
A seller who wants a quick closing has a fair reason to prefer a buyer who can move promptly. The checks are still what stand between you and a bad purchase, so keep the title search and the balance confirmation even when a date is at risk. A seller who will not allow time for due diligence has told you something about the note.
Slowness costs deals too. A buyer who lets a seller’s email sit for weeks will find the note has gone to someone who answered.
Tell the seller your timing at the start
The due diligence period and the closing date are written into the note sale agreement, so know how long your own side needs before you sign one. A buyer who has done the preparation in the investor guide can ask for a shorter period than one who starts looking for an attorney after the offer is accepted.
Add up your own stages honestly: the time your attorney needs with the documents, the title provider’s turnaround, the custodian’s review if there is one. Give the seller that total, and tell them the same day if a stage slips.
Related questions
Can I speed up a note closing by skipping the title search?
Skipping it saves a little time and puts your whole purchase price at risk. The title search is how you find liens ahead of yours, unpaid taxes and recording errors, so keep it even when the seller is pressing for a date.
Does buying through an IRA slow the closing?
It adds a step. The custodian has to review the documents, sign as the buyer and send the funds, each on its own schedule. Ask your custodian how long its review takes before you agree a date with the seller.
When do I start receiving payments after closing?
That is set by the cut-off date in the sale agreement and by how quickly the servicing is handed over. The agreement should say who keeps a payment that arrives around closing.