A Rhode Island note may come from the sale of a two-family or three-family house, or be a second mortgage carried behind a bank loan. We bring several buyers to yours and show each one's pricing.
Details that pull a Rhode Island offer down when nobody explains them.
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 saleRhode Island is small and densely built, and its notes reflect that. There is little open land to sell on terms. The familiar case is a house: a two-family or three-family in Providence, Pawtucket, Cranston or Woonsocket that a long-time landlord sold to a tenant or a younger investor, taking back a note for part of the price. Along the coast, in Newport, Narragansett and the South County towns, notes also come from family sales of older homes held for decades.
Where a bank financed the bulk of the purchase and the seller carried the remainder, the seller’s note is a second mortgage. It sits behind the bank’s loan, which changes who will buy it and at what price.
Rhode Island notes are commonly secured by a mortgage. Mortgages there commonly include a power of sale, a clause that lets the holder sell the property after a default by following steps set out in state law. Foreclosure done that way is non-judicial, meaning it generally proceeds without a lawsuit, and a court route also exists. Land records are kept by each city or town, where most other states use a county office, so the clerk there holds your mortgage and will record any assignment. A Rhode Island attorney or title company can confirm how your own mortgage reads and what the current procedure requires.
The price of a note comes from the return the buyer requires on their money. To earn it, they pay less than the balance you are owed, and anything that makes the payments less certain widens that gap.
| Rhode Island detail | What the buyer asks |
|---|---|
| Second mortgage | What is owed on the first loan, and is it current? |
| Multi-family house | Does the payer live there, and are the other units rented? |
| Coastal property | Is flood and wind insurance in force, with you named on it? |
| Older building | What condition is it in today? |
Lien position, meaning your place in line if the property is sold to pay its debts, carries the most weight of these. A first lien is paid first and a second waits behind it, which is why a second lien is priced lower and why fewer buyers bid on one.
The non-judicial route generally lowers what a buyer expects to spend if the loan fails, so it helps a little. A weak payment record costs more than that route gives back.
A landlord who sold a building to fund retirement may want some cash and some income. A partial purchase does that: you sell a block of upcoming payments, and the remainder of the note returns to you once the buyer has collected them. Lien position and the payment record decide if a buyer will price one on your note.
Before you ask us to price it, get these together:
Say how many units the building has and who lives in them, because a buyer reads a two-family with the payer living upstairs differently from a three-family that is fully rented out.
Sometimes. Fewer buyers take second liens, and those who do want the balance and payment status of the first loan. If there is good equity above both loans, it is worth asking.
Land records in Rhode Island are kept by the city or town where the property sits. The clerk's office there, or a title company, can give you a copy of the recorded mortgage and confirm the recording details a buyer will ask for.
It matters to the buyer, and it can help. Rent supports the payer's ability to pay, but a buyer will also ask if the payer lives in the building. Tell us how many units there are and who occupies them.
It depends on the note. In a partial sale you sell a set number of upcoming payments for cash now and the note comes back to you afterwards. A first lien with a steady payment record is the easier case, so ask for a partial to be priced beside the full-sale offers.