You sold acreage or a lot and carried the financing. Land is a specialty among note buyers, so we take your note to the ones who price it and show you how each offer was worked out.
When only one buyer bids on a land note, that buyer names the price.
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.
Note and mortgage, or land contractPayment history since the saleParcel number and legal descriptionSurvey and property tax receiptsYou sold land with no building on it, took a down payment and agreed to be paid the rest over time. What you hold is a vacant land note, whether the parcel is a rural tract, a recreational property, an unbuilt subdivision lot or acreage sold to a neighbor. The paper is either a promissory note with a mortgage or deed of trust, or a land contract under which you keep the deed until the last payment.
Every note buyer asks what they would own if the payer stopped, and how easily they could sell it. Bare land gives a harder answer than a house does, starting with the payer. Someone who lives in a property has a strong reason to keep paying for it, while the buyer of a weekend parcel can stop with far less disruption.
Value is the next difficulty. Houses on one street can be compared, but parcels a mile apart can differ widely with road access, utilities, slope, flood risk and zoning. A note buyer who had to take the land back could wait a long time for the next purchaser, with property taxes running throughout.
On a small balance cost matters too, because checking title and closing cost much the same on any note. As an example, $3,000 of costs is 2% of a $150,000 note and 10% of a $30,000 note.
Each of these pushes a buyer toward a lower price, and so a wider gap between the balance owed to you and the price paid, than the same terms would get on an owner-occupied house. Land is also one of the types of note that some buyers do not bid on at all, while others specialize in it. So a note on vacant land can be sold, but a single offer is a poor guide to what yours is worth.
On land, buyers look first at how much of their own money the payer has in the deal. A large down payment followed by several years of payments means the payer would lose something real by walking away. A note with little down and a short record leans on the parcel alone.
A buyer who has to guess about the land will guess low. Look for these:
When you send us the note details, add the parcel number and what you know about access and utilities. Say where the parcel sits as well, since a lot in or near a town is easier to resell than remote or landlocked acreage.
Find out who has been paying the property taxes. After a land sale the bill can keep arriving in the seller’s name, and unpaid taxes can put a lien, a legal claim against the property, ahead of yours. If your sale was a land contract, check whether it was recorded. A buyer will want an unrecorded contract recorded or will price in the uncertainty.
Selling only the next few years of payments, called a partial, lowers the buyer’s risk, and it suits a land note with a solid payment record and a balance large enough to carry the closing costs. On a small balance with a short record, those costs take too large a share of the cash a partial would raise. In that case another year of payments on the ledger may leave you with more to sell than you have today.
Some will. Land is a specialty, because the buyer has to judge a parcel with no house on it, so the offers you get depend on reaching the buyers who price it regularly.
It matters more on land than on almost any other note. A payer who put a large amount down has more to lose by stopping, and buyers price that directly.
Often yes, but the fixed costs of checking title and closing take a bigger share of a small note. Some buyers set a minimum balance. We will tell you plainly if selling is unlikely to be worth it.
It changes the paperwork. With a land contract you still hold the deed, so the sale involves assigning the contract and transferring your interest in the property. Buyers who know land contracts handle this routinely.