Who Buys Real Estate Contracts?
Posted by Admin on May 14, 2018 | 0 Comment
We often get asked by potential clients, “Who buys real estate contracts?” Or, more importantly, “will you buy my real estate contract?” Though we wish the answer were a clear-cut yes or no, in most cases, it’s simply not.
You see, the correct answer actually depends on the person’s definition of the term “real estate contract,” as it technically has two distinctly different meanings.
The Two Types of “Real Estate Contracts”
First, a real estate contract can be a mortgage note or seller financed loan – something we specialize in here at Amerinote Xchange. These notes and loans can be sold to another party, often called a note buyer, in the event that the seller no longer wants to manage a loan themself.
Additionally, the term “real estate contract” can refer to a literal contract on real estate being bought or sold. (When you purchase a house, you put it under contract. In most cases, this “real estate contract” can also be sold, much like selling a mortgage note or seller-carried loan can.)
The question of who buys real estate contracts depends on which of these two uniquely different phrases the asker is referring to. Let’s take a look at each one more in depth, and discuss who would buy each type of contract and when.
Who Buys Real Estate Contracts in Note or Seller-Financed Loan Form?
In most cases, when someone is referring to a “real estate contract,” they’re talking about either a mortgage note or a seller-financed loan. Maybe they agreed to finance the sale of their home in order to speed up the process, or they could be an investor looking to get out of the business. Whatever the reason is, they’re hoping to sell their real estate contract and move on to other things.
Because mortgage notes are, by default, assignable – meaning they can be transferred to another party – selling them is almost always an option. The only thing that would prevent the sale of a mortgage note or seller-financed loan would be a specific clause put in the contract to do so. If this clause is not present in the real estate contract, a number of parties may be interested in purchasing it, including:
- Note buyers (like Amerinote Xchange)
- Private investors
- Hedge funds
Note buyers are typically your best bet in these types of cases, as they can offer you a quick, clean sale without a lot of hassle or negotiating. When you’re trying to offload a burdensome mortgage loan or note, this often a huge benefit – both financially and time-wise.
If selling real estate notes to a note buyer is something you’d like to consider down the line, make sure to factor this in when creating the note from the outset. There are several steps you can take to make your note more attractive to potential buyers, including being choosy about location, market, note type and more. Make sure to read this post on optimizing your mortgage note for sale before getting started.
Who Buys Real Estate Contracts or Actual Pieces of Real Estate Being Bought or Sold?
“Real estate contract” can also refer to a piece of property that’s under contract to either buy or sell. Many times, these are being sold as “flips.” Either an investor bought the home at an auction and is reselling at a higher price point, or they’re renovating the property and flipping the contract down the line. Either way, these contracts are also assignable and can be sold to another buyer as long as there is no clause stipulating it’s not allowed.
If you are planning to flip a contract on a piece of real estate you’re purchasing, make sure to name yourself as the assignee from the get-go. Just add “and / or assigns” immediately after your name on the contract offer. If the seller agrees to your contract, you’re safe to flip and sell the contract at a later date.
In general, these types of real estate contracts will be most interesting to private investors, banks, hedge funds and portfolio managers. Note buyers may also be interested in purchasing these types of real estate contracts, though it typically depends on where the property in question is located. If it’s in a high-demand, high-value market, the returns will likely make the contract an appealing purchase for the buyer. If the property is in a stagnant market without much upward mobility, the potential returns may not catch a note buyer’s eye. You can always get a free quote from a buyer if you’re not sure which bucket your property falls into.
Are You Looking to Sell Real Estate Contracts?
Regardless of which type of real estate contract you’re looking to sell, Amerinote Xchange can help. On notes and seller-financed loans, we’ll give you fast and competitive quote in less than 24 hours. That means money in your pocket – and less hassle – is only a day away. Just fill out our online form, and we’ll get started right ASAP.
We can also consider purchasing real estate contracts on properties being bought or sold. If you’re flipping real estate contracts, simply fill out our form, and depending on the location and market trends of the properties in question, we’ll send you a customized quote the same day.
To learn more about who buys real estate contracts, the benefits of using a note buyer or how to sell a real estate note, see our blog or contact Amerinote Xchange today.