A Wisconsin duplex, farm or lake cabin sold on a mortgage or a land contract can be turned into cash. What a buyer pays depends on which document you signed and on how much your payer has invested.
Why a Wisconsin note holder hears a lower number than the note deserves.
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 saleA Wisconsin seller who financed a sale signed one of two arrangements, and the first thing a note buyer will ask is which.
With a note and mortgage, the person who bought your property received the deed at closing and gave you a mortgage as security. If they default, foreclosure generally goes through the courts in Wisconsin.
With a land contract, you kept the deed and the buyer earns it by finishing the payments. Land contracts have a long history in Wisconsin, as they do in other Midwestern states, between family members and between strangers. A default under one is also commonly dealt with in court, and the remedies open to you can differ from those under a mortgage. Which remedies apply to your contract is something to put to a Wisconsin attorney, since the answer turns on the document and on current law.
Either one can be sold, though selling a land contract adds a step involving the deed.
In Milwaukee, Racine and Kenosha the collateral is often a duplex or an older single-family house sold by a landlord who is done with tenants. Around Madison, Green Bay and the Fox Cities it may be a starter home sold to a buyer who is new to the country or new to self-employment. Farther out it is farm ground and what comes with it: a dairy operation in Marathon or Clark County passed to the next farmer, a hunting forty in the Driftless hills, a cabin on a Northwoods lake near Minocqua, Eagle River or Hayward, a cottage in Door County.
The holder may be retired and spending half the year in Arizona or Florida, or an heir who took over the file from a parent and has never seen the original paperwork.
A buyer sets a price by asking what return they need for the risk they are taking. A court foreclosure generally takes longer and costs more than an out-of-court sale, and a Wisconsin borrower generally has a period in which to redeem, meaning to pay what is owed and keep the property. A buyer builds both into that return, which lowers the price.
For the same reason a buyer of Wisconsin paper pays close attention to whatever makes a default unlikely, and equity comes first. A payer who put real money down and has paid the balance lower has a reason to keep paying, and the buyer has a cushion if they do not.
Seasonal and farm property adds questions of its own. On a lake cabin a buyer asks about the septic system, winter access and whether the frontage is what the listing said. On farm ground they ask what the sale included: buildings, equipment or land alone.
Before asking anyone for a number, work out the two figures a buyer will look at first. One is the down payment as a share of the sale price. As an example with round figures, $30,000 down on a $200,000 sale is 15% of the price. The other is how far the balance has fallen since closing, which your ledger or bank record of payments will show. A buyer uses them to work out equity and investment to value, the measures of how much cushion stands behind the note.
Put both figures with the note and mortgage, or the land contract, when you share the details with us. If the down payment was small, the years of payments since closing are what a buyer will weigh in its place, so make sure the ledger has no gaps.
Wisconsin loans are commonly secured by a mortgage, and foreclosure generally goes through the courts. Land contracts are also widely used in seller-financed sales. A buyer reads your recorded document to see which one applies.
Yes. Because you still hold the deed, the buyer of the contract takes a deed from you together with an assignment of the contract. Your payer keeps the same terms and the same right to receive title once the contract is paid.
It is one of several things a buyer weighs, since it can lengthen the time before a property taken back could be resold. It does not block a sale, and a payer with a long record and real equity makes it matter less. An attorney in Wisconsin can explain how it applies to your document.
It can. Buyers look at access, septic, the down payment and what the property would resell for. Seasonal and agricultural property has fewer comparable sales than a house in Madison or Milwaukee, so buyers can disagree on value and it pays to compare several.