Idaho note holders are often people who sold a home, a building lot or rural acreage and carried the loan themselves. We bring that note to several buyers and show you how each one priced it.
How an Idaho note holder ends up with a weaker number than the note deserves.
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 saleIdaho has grown quickly, and a good share of that growth has been people selling one place to buy another. In the Treasure Valley, which takes in Boise, Meridian, Nampa and Caldwell, sellers have carried financing on older homes, small rentals and building lots. Around Coeur d’Alene, Sandpoint and the northern lakes the notes sit on cabins and timbered parcels, and in the east, near Idaho Falls, Pocatello and Twin Falls, on farm ground and small-town houses.
Rural land is a large part of the picture. A rancher sells off twenty acres to a newcomer who wants room for horses, takes a down payment and a monthly check, and becomes a note holder without ever planning to. That monthly check is an asset a note buyer will pay a lump sum for.
The deed of trust is the commonly used security instrument in Idaho, and what applies to deed of trust notes in general applies here. It involves the payer, you as the lender, and a trustee who holds a form of title until the debt is paid. If the payer defaults, the trustee can generally sell the property under the power of sale in the document, which is a non-judicial foreclosure: the property is recovered with no full court case.
Land complicates this. Idaho restricts which properties can be foreclosed by trustee sale, and a larger rural parcel may fall outside that route and need a court process instead. Where the line falls depends on the parcel, so ask an Idaho attorney or the title company that will handle the closing which route applies to yours.
The answer feeds straight into price. A buyer decides what return they need on the money they put in and works back to an offer. Where a trustee sale is available, recovery risk generally weighs a little less in that return than it would under a court process, which is the expected route in a number of other states.
A buyer who cannot answer these prices in the doubt, and one who gets clear answers up front can bid with more confidence. A home on acreage that is described only as “20 acres” risks being priced like bare ground, so say what is on the land.
Values in parts of Idaho have changed a great deal since some of these sales were made. The figure a buyer cares about is equity, the gap between what the property is worth now and what the payer still owes. As an example only: a payer who owes $70,000 on a parcel that sold for $100,000 started with $30,000 of equity, and if the parcel is now worth $140,000 the equity is $70,000, half the value. A current valuation puts that on paper for the buyer, who measures the cushion as equity and investment to value.
If you have a recent valuation, attach it when you give us the details of your Idaho note. Without one, the note, the recorded deed of trust, your payment history and whatever documents access and water are enough to start.
Yes, the deed of trust is the commonly used security instrument in Idaho. It names a trustee, often a title company, who can sell the property after a default under a power of sale. Mortgages exist in Idaho too and are generally enforced through the courts.
Yes. Buyers will ask about the size of the down payment, year-round road access, water and power, and how the value was established. Bare land is easier for a payer to walk away from than a home, so some buyers pass and it helps to ask several.
A trustee sale is a foreclosure carried out by the trustee without a full court case. Because that route is generally quicker and cheaper than a lawsuit, buyers tend to see slightly less recovery risk. Large rural parcels can be treated differently, so check with an Idaho attorney.
No. The assignment is recorded in the Idaho county where the property sits, and the closing can be done by mail through a title company. Ask the title company which documents it needs from you with original signatures.