You sold a farmhouse, a camp or a ski condo in Vermont and took payments in place of a bank. We put that note in front of competing buyers and show you how each offer was worked out.
What costs a Vermont note holder money before the payer is even looked at.
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 saleVermont has a lot of property that banks are slow to lend on: an old farmhouse with a barn and forty acres, a hunting camp at the end of a dirt road, a sugarbush lot, a condo near Stowe, Killington or Mount Snow, a two-family house in Rutland or Barre, a village home in the Northeast Kingdom. When the buyer is self-employed or works by the season, or the place does not fit a lender’s checklist, the seller is the one left to carry the loan.
Some of those sellers have since left. They sold a second home and went back to Massachusetts, Connecticut or New York, or retired south, and a check still arrives every month from a buyer in Chittenden County or the Upper Valley. If that check comes to you, you hold the note.
Vermont land records sit with each town clerk, and there is no county office to search as there would be in most other states. For a note buyer that means the title search, the check that your lien was recorded and that nothing ranks ahead of it, happens in the town where the property stands. A small office with short hours can make that step slower than it would be elsewhere, so it helps to know in advance the book and page where your document was recorded.
The note is the payer’s promise to pay you. The recorded document that ties that promise to the property is commonly a mortgage in Vermont, and when a payer stops paying, taking the property back generally runs through the courts. How that works on a given loan depends on the wording of the mortgage and on the property, so ask a Vermont attorney or the title company handling the sale how it applies to yours.
A court process costs a note buyer more time and legal expense after a default than an out-of-court sale would. The buyer allows for that by asking a higher return on the money they pay you, and a higher return means a lower price and a wider gap between that price and the balance still owed. The same reasoning makes the things that keep a default from happening count for more: the equity your payer has in the property, and the length of the on-time payment record, which buyers call seasoning.
On a camp or a back-road farmhouse the questions get practical. Does the town maintain the road all winter, or is it a seasonal road that nobody plows? Is there a working well and a permitted septic system? With few recent sales nearby to compare against, two buyers can value the same camp very differently, which is why a single quote on this kind of property tells you so little. If one quote is all you hold, ask us for a second price to set beside it. Where there is little or no building, expect the checks a buyer runs on any vacant land note.
Find the note, your copy of the recorded mortgage with its book and page, and whatever shows the payments. Bank statements serve better than a notebook because a buyer can verify them. Write down what you know about the road, the water and the septic. If the book and page are missing from your copy, the town clerk’s office can generally find the recording from the names on the mortgage and the year of the sale.
Commonly a mortgage. It is recorded in the land records of the town where the property sits. A buyer reads your recorded document to confirm what you hold and whether it was recorded correctly.
Yes. A buyer prices the property and the payer, and both stay in Vermont wherever you are. The closing can be handled by mail through a title company or attorney.
It can. Buyers ask about year-round road access, water, septic and what the property would resell for. With few comparable sales nearby, two buyers can reach different values for the same camp, so it helps to see several offers.
It is one factor a buyer weighs, because a default would generally take longer and cost more to resolve. A strong payment record and good equity pull the price the other way. Ask a Vermont attorney how the process applies to your mortgage.