Minnesota sellers finance farms, lake cabins and city houses, often by contract for deed. We take your note or contract to more than one buyer and show you exactly how each offer was worked out.
What costs Minnesota note and contract holders money at the quote stage.
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 saleAsk a Minnesota seller what they hold and you may hear “a contract for deed”. That is the local name for a sale in which the buyer pays the seller over time and gets the deed at the end. Farm families use it to pass land to the next generation in the south and west of the state and in the Red River Valley. Cabin owners use it in the Brainerd lakes area and across the north, and investors use it on houses in Minneapolis, St. Paul, Duluth, Rochester and St. Cloud.
Other sellers hold a standard promissory note and mortgage. Either can be sold, though a contract for deed and a mortgage are governed by different rules. Those rules are Minnesota’s only if the land is here. A farm across the river in North Dakota or a cabin in Wisconsin belongs under that state’s page.
With a note and mortgage, the borrower owns the property and you hold a lien on it. Minnesota mortgages commonly include a power of sale, and foreclosure is commonly done by advertisement: a published notice and a sheriff’s sale, without a full lawsuit. A redemption period, a window in which the borrower can pay and keep the property, commonly follows.
With a contract for deed, you still hold title. If the buyer defaults, the contract is commonly ended through a cancellation process set by state law, generally by notice. Minnesota has revised its contract for deed rules in recent years, and some of those rules depend on who the seller is, so have a Minnesota attorney read your contract before you lean on a general description like this one.
Land here is also either abstract property or Torrens property. Torrens title is registered with the county, and transfers are filed with the registrar of titles. Your original closing papers should show which yours is, and a buyer’s title company needs to know.
Every buyer starts from the payments left, discounted at the return they want on their money, which puts the price below your balance. The adjustments come after that.
The instrument is one. Mortgage notes go to the widest group of buyers, while some buyers stay away from contracts for deed, partly because the rules have been changing. The property is another: a year-round house in the Twin Cities is easy to value, and a seasonal cabin or a quarter of farmland takes more work, so buyers want more equity behind it. Equity is the property’s value less what is still owed. Records matter as well. A recorded contract, proof that taxes are paid, and a payment history from a servicer or from bank statements all support the price.
A balloon is a large final payment that falls due when the regular payments stop. A buyer who takes over your contract inherits the question of whether the payer can refinance or pay it when the date arrives, and prices that doubt. Find the balloon date and amount in your contract and count the payments received so far, because those are the first things a buyer asks about when you are selling a note with a balloon payment.
With those figures and the contract, or the note and mortgage, you can request pricing on your Minnesota note. Say whether the document was recorded, since a buyer of a contract for deed will want to know that early.
Yes. You assign your interest as seller under the contract, and the buyer of that interest collects the remaining payments. They will want the contract, proof it was recorded if it was, and your payment history.
They can. Minnesota has changed its contract for deed rules in recent years, and buyers pay attention to how a contract was written and who the seller was. An attorney can tell you how the current rules apply to yours.
On a mortgage with a power of sale it is commonly non-judicial, done by advertisement, with a redemption period commonly following the sale. A contract for deed is handled differently, commonly through a cancellation process. Ask a Minnesota attorney about your documents.
Yes. Farmland and seasonal property take more work to value than a house, so the group of buyers is smaller and they want more equity in the property. Good records and a long payment history widen the field.