A note pricing worksheet is a one-page breakdown of how an offer on your note was reached. It lists the facts of the note, the yield the buyer used, the price that yield produces, the discount, and what everyone in the deal earns.
What is on it
Here is the layout, filled in for a note that pays $1,140 a month at 6% with 14 years left.
| Line | Example | What it tells you |
|---|---|---|
| Balance still owed | About $129,400 | The unpaid principal, and the date it was figured |
| Monthly payment | $1,140 | What the buyer will collect each month |
| Payments left | 168 | How long the buyer waits to be repaid |
| Rate on the note | 6% | What the note earns as written |
| Property value assumed | Stated in dollars | The figure used to judge the security |
| Buyer’s yield | 8% | The return the buyer needs on their money |
| Price | $115,000 | What those payments are worth at that yield |
| Discount | $14,400 (11.1%) | Balance minus price |
| What we earn | Stated in dollars | Our fee or margin on this offer |
| Costs and who pays them | Listed one by one | Title, recording and similar items |
| Net to you | Stated in dollars | The amount you would actually receive |
Illustrative example. The lines without a figure depend on the deal and are filled in on a real worksheet.
A partial offer gets its own worksheet, which adds the number of payments being sold, the cash paid for them and what returns to you afterwards. On this note a 60-payment partial would show $56,200 today and a note coming back with 108 payments and about $94,950 owed, figures that are illustrative as well.
Why it exists
A note holder handed a single figure and asked for a yes or no cannot tell a careful price from a low one. The worksheet puts the working next to the answer, so you can check it, question it and compare it with another offer. Treat it as the reasoning for the offer in front of you, based on the facts known at that point. The contract and the final price come later.
Every offer we bring comes with its worksheet, whether we are buying the note ourselves or bringing in outside buyers, and you can request a priced offer on your note to see one.
How to read one
- Start with the facts. Confirm the balance and the number of payments against your own records, because an error here carries through every line below it.
- Find the yield. The yield on a note is the buyer’s judgment of it in a single figure, so ask what would bring it down.
- Follow the price to the net. The price and the amount that lands in your account can differ. Look at what is taken off and why.
- Look at what we earn. It should be a plain dollar amount that you do not have to work out for yourself.
- Read the assumptions. The property value and the payment record may still be estimates at this stage. The worksheet should say which lines could change after the buyer’s review.
Comparing offers with it
Put two worksheets side by side and the reason for a price gap shows in the lines: one buyer used a higher yield, or assumed a lower property value, or took off costs that the other left out. To compare offers on your note you need those lines from every bidder, because without them you are setting two totals side by side and guessing.
What a worksheet cannot do
It cannot make the price final. The buyer still has to review the documents, the title and the property, and a fact that turns out different can change a line. The worksheet makes any such change traceable, because you can ask which line moved and see the before and after.
Nor can it tell you whether to sell. It shows the cost of selling, and what your note is worth to one buyer on one day, clearly enough for you to weigh against keeping the note.
Asking another buyer for the same lines
If you hold an offer from someone else with no working shown, ask for the balance used, the yield, the price, any fees and your net. Those are reasonable requests of anyone bidding on your note, and a refusal to give the yield is worth weighing. Lay the answers out in the order of the table above. Knowing how note buyers calculate a price will then let you check that the yield and the price agree with each other.
Related questions
Is the price on a worksheet final?
No. It reflects the facts known when the offer was made. The buyer still reviews the documents, the title and the property, and a change in any of those can change the price. The worksheet lets you see which line moved.
Will other note buyers give me a worksheet?
Some will show their working and some will not. You can ask any buyer for the balance they used, their yield, the price, any fees and your net amount. Those figures do the same job.
Do I have to pay for a worksheet?
No. Quotes are free and carry no obligation, and the worksheet comes with each offer. You can read it, ask questions and decide not to sell.