You carried the financing and your buyer signed a note secured by a deed of trust. We bring that note to competing buyers and give you the worksheet behind every offer.
Gaps in the file and in the process that cost a holder money.
The same worksheet comes with every offer.
| Remaining balance | $129,400 |
|---|---|
| Payments left | 168 |
| Buyer’s target yield | 8.0% |
| Purchase price | $115,000 |
| Discount from balance | 11.1% |
| Our fee | shown on every offer |
| Sell the whole note | Sell 60 payments | Keep it | |
|---|---|---|---|
| Cash today | $115,000 | $56,200 | $0 |
| Payments still coming to you | None | 108 payments of $1,140 | 168 payments of $1,140 |
| Total you receive | $115,000 | $179,320 | $191,520 |
| What you give up | Every future payment | The next five years | A lump sum now |
Illustrative example. Totals add up the payments as scheduled; they assume the payer keeps paying and are not adjusted for the value of money over time.
Original promissory noteRecorded deed of trustClosing statement from your salePayment historyWhen you sold your property and carried the financing, your buyer signed a promissory note, which is their promise to pay you, and a second document that secured the promise against the property. In many states that second document is a deed of trust where other states would use a mortgage.
A deed of trust names three parties. The borrower is called the trustor. You, the person owed the money, are the beneficiary. A neutral third party, the trustee, holds a limited form of title to the property until the loan is paid.
People say “deed of trust note” as shorthand for the pair. What you sell is the note, and your position as beneficiary goes with it.
For pricing, very little separates a deed of trust note from a mortgage note. A buyer discounts the remaining payments at the return they need and adjusts for the equity in the property and the payer’s record, so the difference between a mortgage and a deed of trust barely shows while the payments arrive.
Where they part is on default. A deed of trust normally contains a power of sale, a clause that lets the trustee sell the property if the borrower defaults, generally without a full court case. A buyer who expects recovery to cost less and take less time can accept a slightly lower return, and that supports your price. How this works in practice depends on the state and on the wording of your document, so read it as a general pattern and ask a local attorney or title company about your own.
On an older deed of trust, the title company named as trustee may have closed or merged. A document called a substitution of trustee is the normal repair, and it is easier to arrange before a buyer raises it than during their review.
Recording is the next thing to confirm. Without it, your lien may not hold its place against later claims, so check with the county recorder that the deed of trust is on file and that the legal description matches the property. While you are there, look for a bank’s deed of trust recorded before yours. If there is one, you hold a second lien, which sits apart from a first among the types of notes you can sell and is priced differently.
Then there is the note itself. Holders often send the recorded deed of trust and assume that is the whole file, but the buyer wants the original promissory note. If you cannot find it, say so in your first message, because it changes which buyers can take the file.
You will want the original note, the recorded deed of trust, the settlement statement from your sale and your payment record. When you send us the details of your note, mention anything from the section above that applies. Then write down the trustee’s name exactly as it appears on the document and find out whether that company still exists, because the answer decides whether a substitution has to be signed before closing.
They do the same job, which is to secure a loan against real estate. A mortgage has two parties and a deed of trust adds a third, the trustee. Which one is used mostly depends on the state where the property is.
Both, together. The promissory note is the debt, and it is endorsed to the buyer. The deed of trust is the security, and it is assigned to the buyer and recorded with the county.
Generally not. The trustee's role is tied to releasing the lien when the loan is paid and to acting on a default. Selling your interest as beneficiary is normally your decision, though the wording of your own documents governs.
Not as a rule. Price comes from the payments, the equity, the payer's record and the lien position. Where a deed of trust allows a simpler route to recover the property, some buyers see slightly less risk, but it is one factor among several.