Notes in the District are tied to row houses, condos, co-ops and small apartment buildings, often with large balances. We take yours to competing buyers and give you a worksheet for every offer.
City property raises questions that a rushed buyer answers in their own favor.
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 saleThere is no rural land in the District of Columbia and very little that is cheap. A note here is tied to city property: a row house on Capitol Hill or in Petworth, Brookland or Columbia Heights, a home east of the Anacostia River, a condo unit, a co-op apartment, or a small apartment building with a handful of units.
The holders include long-time owners who sold a house they had lived in for decades and agreed to carry the loan, heirs who inherited that arrangement, and small investors who sold a rental on terms. Some now live across the line in Maryland or Virginia, which makes no difference to a buyer, who cares only that the property is in the District. The reverse case, a District resident holding a note on a Maryland or Virginia house, goes by the state where the property is.
The District has a good number of co-operative buildings. A co-op owner holds shares in a corporation and a right to occupy a unit, with no deed to the unit itself, so a loan on a co-op is secured by those shares. That puts it outside what buyers mean by a real estate note, and only some of them purchase share loans. Tell us at the start if this is what you hold.
If the property is rented, a buyer will want to know that too. The District has extensive tenant protections, and they shape what an owner can do with a building. A buyer thinking through the worst case, in which they end up owning the property, takes the tenants into account.
Loans on District real estate are commonly secured by a deed of trust, recorded with the Recorder of Deeds. A deed of trust involves a trustee who holds a limited form of title until the loan is repaid, and that third party is the difference between a mortgage and a deed of trust.
Foreclosure is the process for recovering a property after the payer defaults. In the District, the way it is carried out in practice has shifted over time between out-of-court sales and court cases. We would be guessing if we told you which applies to your note today, so ask a District attorney or a title company that closes there.
A buyer pays what your remaining payments are worth today at the yield they require, and that comes to less than the balance your payer owes.
Where a District property is worth well above the debt on it, that equity is the strongest thing in your favor, and a current valuation is how you prove it. Uncertainty over how a default would be handled works against you, which makes a clean payment record count for more here. On a large balance it is also worth looking at a partial purchase, the sale of a block of payments, alongside a full sale.
Row house, condo, co-op or apartment building, owner-occupied or rented: put that in the first line when you send us the details of your District note, and attach the note, the recorded deed of trust and proof of payments. A co-op loan has different papers: the share certificate and the proprietary lease or occupancy agreement stand in for the deed of trust.
Commonly by a deed of trust recorded with the District's Recorder of Deeds. A deed of trust names a trustee in addition to the borrower and the lender. A loan on a co-op unit is documented differently because the collateral is shares, not real estate.
Practice in the District has changed over the years and both court and out-of-court routes have been used. We do not want to guess at the current position. Ask a District attorney how it applies to your deed of trust.
Yes. Tell us that it is rented and to how many households. The District has detailed rules protecting tenants, and a buyer wants to understand the occupancy before pricing the note.
Yes. Where you live does not affect the sale. The rules that matter are those of the District, where the property is, and the closing can be handled without you travelling.