North Dakota notes sit on Fargo and Bismarck houses, Red River Valley farmland and property in the western oil counties. We take yours to buyers who bid on that collateral and show the math.
What holds a North Dakota offer down.
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 saleNorth Dakota is a farm state with a handful of growing cities, and its notes reflect both. In Fargo and West Fargo, Bismarck and Mandan, Grand Forks and Minot, holders are people who sold a house or a small commercial building and financed the buyer. In the Red River Valley and across the central counties, they are more often farm families who sold cropland or a farmstead to a relative or a neighbor and took payments.
The western counties around Williston, Dickinson and Watford City are their own case. Houses and lots there were bought and sold on terms as oil activity rose, and property values in those towns have moved with drilling.
Buyers work from the return they want on the price they pay, and they lean on equity, which is what the property is worth minus what is still owed, to protect that return. On North Dakota collateral that puts weight on the valuation. In the oil counties a buyer will want a current opinion of value in place of the price from the year of the sale, a point covered on our page about whether a property valuation matters.
Mineral rights are often owned separately from the surface in North Dakota, so a buyer will check whether your mortgage or contract covers the minerals or only the surface. On farm ground they will also ask about any lease, since a tenant’s rights affect what a new owner could do with the land after a default.
Farmland and small-town property take local knowledge to value, so fewer note buyers bid on them than on city houses, and asking more than one is how you find those who do. When you start a quote for your note, say whether the land is leased and whether the minerals are included, so the right buyers are asked.
North Dakota commonly uses a mortgage, a lien or legal claim on the property, and a mortgage is generally foreclosed by a court action, which is judicial foreclosure. Court foreclosure adds time and cost to a default, and that is one reason buyers lean on equity here.
The contract for deed is also widely used in the state, for farmland in particular. Under one, you keep the deed until the buyer has paid in full. Ending a contract for deed after a default follows a different process from foreclosing a mortgage, and it differs again from one state to the next. Which process applies here, with what notice, depends on the document and the facts. Our comparison of a contract for deed and a mortgage explains the difference in plain terms. For your own document, take the question to a North Dakota attorney or a title company, since these procedures are amended from time to time.
Locate the note and mortgage, or the contract for deed, and read the property description for any mention of minerals. If it is silent or you cannot tell, a title company can show you what the record says. Ask the county recorder at the same time whether your contract for deed was recorded, and keep the answer with your record of payments.
Yes, in most cases. The buyer takes an assignment of the contract and the title that goes with it. Expect questions about the land's current value, any farm lease, and whether the contract was recorded.
They can. Mineral rights are often owned separately from the surface in North Dakota, so a buyer will check what your mortgage or contract actually covers. It affects how they value the collateral. A title company or attorney can tell you what the record shows.
A mortgage in North Dakota is generally foreclosed by a court action. A contract for deed follows a different process when a buyer defaults. The steps depend on the document, so confirm them with a local attorney.
Expect one. A buyer wants a current opinion of value, especially in the western counties where prices have moved with oil activity, and arranges it during due diligence.