Kansas note holders range from Wichita landlords who sold rentals to ranch families who financed a pasture sale. We ask competing buyers to price your note and show you how each one got to its number.
Issues a Kansas note holder should expect to come up.
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 saleKansas notes divide roughly along the line between the eastern cities and everything west of them. In the Kansas City suburbs of Johnson and Wyandotte counties, and in Topeka and Lawrence, the notes are mostly on houses: an owner sold a starter home or a rental and carried the loan. Wichita, the largest city, has small landlords who have sold properties to their tenants over the years.
Further west, around Salina, Hutchinson, Hays, Dodge City and Garden City, the property behind a note is more likely to be a farmstead, a quarter of wheat ground, pasture, or a house in a town of a few hundred people. Families finance these sales themselves because the buyer is a relative or a neighbor, and because the amounts are too small or too unusual for a bank.
Where the property sits inside Kansas matters as much as anything in the law. A house in Overland Park or east Wichita can be resold readily, so a buyer is comfortable with it as security. A house in a small western town may take much longer to sell, and a buyer will want more equity behind the note to make up for that. Equity is the difference between the property’s value and the balance owed: as an example only, $45,000 owed on a house worth $60,000 is $15,000 of equity, a quarter of the value. Because the town counts for this much, name it when you send us your Kansas note, and say what kind of property it is.
Kansas commonly uses the mortgage. Your payer signed a promissory note and a mortgage, and the mortgage was recorded with the register of deeds in the county where the property lies. Foreclosure, the legal process for taking back the property when a payer defaults, is generally judicial in Kansas, so the holder brings a court case and the court orders a sale.
Kansas law also gives a payer certain rights after a foreclosure sale, and how far they extend can depend on how much of the debt has been paid. A Kansas attorney or title company can tell you how that works today and what it means for your note. A note buyer works from the return required on the price paid, and risk pushes that return up. With a court case and the payer’s later rights both in view, a buyer allows for a slower and less certain recovery than in a state where the sale happens outside the courts.
On farm and ranch ground, expect to be asked about minerals and water. If the mineral rights were kept by an earlier owner, or irrigation rights go with the land, the buyer needs to see it in the recorded documents, because it changes what the security is worth. Whether the ground is leased to an operator is part of the same picture. If your note is on bare ground, a buyer will also put the questions that go with vacant land notes.
Bring together the note, the recorded mortgage, a payment history and proof that the taxes and insurance are current, plus any deed that reserved minerals. These head the longer list of documents you need to sell a note. On farm or ranch ground, add the lease if an operator works the land, and any paperwork for a water right.
Generally, yes. Mortgages are the commonly used security instrument in Kansas, and foreclosure is generally handled through the courts. A buyer of your note takes the note by endorsement and the mortgage by a recorded assignment.
Yes. A buyer will ask about the acreage, how it is used, whether it is leased, and what supports the value. If mineral or water rights were kept back or sold with the land, have that paperwork ready because it affects what the security is worth.
Often, yes. A contract for deed is a sale where you hold title until the payer finishes paying. Buyers will want to know how a default would be handled, and that varies with the contract and the facts. Ask a Kansas attorney about yours before you request offers.
It can, though the pool of buyers is smaller. Buyers think about how easily the house could be resold if they had to take it back. A solid down payment and a long on-time record carry more weight where local demand is thin.