From Northwest Arkansas houses to Ozark acreage and Delta farmland, plenty of Arkansas property is sold with the owner carrying the loan. We bring your note to competing buyers and show you how each offer was built.
Small problems in the file turn into large cuts when only one buyer looks.
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.
The promissory noteThe mortgage or deed of trustA payment historyThe closing statement from the saleArkansas has pockets of fast growth and long stretches of country, and seller financing appears in both. In the northwest corner, around Fayetteville, Springdale, Rogers and Bentonville, owners sell houses and small rentals on terms to buyers who are new to the area or short on credit history. The same happens in Little Rock, North Little Rock, Conway, Fort Smith and Jonesboro.
Outside the cities the collateral changes. Wooded acreage in the Ozarks and the Ouachitas, cabins near Greers Ferry Lake and Bull Shoals, lake lots around Hot Springs, and cropland in the Delta along the eastern side of the state are all sold with the owner carrying the note. Sometimes the seller is a family passing on land it has held for generations, which can mean an old deed and a boundary nobody has measured in decades.
A note is secured by a second document that is recorded with the county and attaches the debt to the property. From state to state, one form or the other tends to dominate. Arkansas uses both: the mortgage, with two parties, and the deed of trust, which adds a trustee. If you are not sure which you hold, look at the title of the recorded document, or read how a mortgage differs from a deed of trust.
Foreclosure is the process a holder uses to recover the property when the payer stops paying. Arkansas has a court route and an out-of-court route. Which is open to a given note depends on the wording of the document and on conditions set in state law, and practice varies enough that we will not say which applies to yours. An Arkansas attorney or a local title company can read the document and tell you.
A buyer decides what return they need for the risk, then pays the sum today that delivers it from your remaining payments, which is why that sum is below the balance owed.
Because two routes exist, a buyer of an Arkansas note reads your document closely. A clear power of sale, a correct legal description and proof of recording all remove doubt, and with less doubt a buyer can accept a lower return and pay more. We look for the same things on the document when you send us an Arkansas note to price.
Then comes the property. In the hills, a buyer wants to know there is a recorded right to reach the land and that the boundaries were surveyed, as opposed to described by a fence line and a creek. In the Delta, they ask about flood risk and whether the land is leased to a farmer. On a lake cabin, they ask whether anyone lives in it year-round. Equity runs through all of it: the more the property is worth compared with the balance, the safer the buyer feels, and how buyers measure that equity is worth knowing before an offer arrives.
On Arkansas acreage a survey answers the boundary and access questions before a buyer has to ask them. Pull it out along with the note, the recorded mortgage or deed of trust, the closing papers from your sale and your payment record. If you have no survey, say so and describe how the land is reached: a county road, a recorded easement across a neighbor’s land, or a track everyone has always used.
Both are in use. Which one you hold depends on how your sale was papered at closing. Either can be sold. The buyer reads the recorded document to see what steps a default would involve.
Arkansas has a court process and also an out-of-court process that can apply when the document contains a power of sale and certain conditions are met. Which one fits your note is a question for an Arkansas attorney. A buyer will check before pricing.
Yes, if a buyer can get comfortable with the property. They look for recorded access, a clear legal description, the payer's down payment and a steady payment record. A survey, if you have one, is worth including.
Not necessarily. Where the payer is reliable and enough payments remain to divide, you can sell a set number of them and keep the rest, which is called a partial purchase. You receive less today than in a full sale and you keep the later payments.