Real Estate Note Buyers

How to Find the Best Real Estate Note Buyers

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If you’ve financed the sale of investment property through a private real estate loan, you likely hold the borrower’s promissory note. Known as a real estate note, this legal contract outlines the loan terms and acts as collateral. Over time, note holders may wish to sell their notes to generate cash flow.

However, entering the secondary real estate note market can feel complex. This guide will explain a real estate note and then provide tips on researching, comparing, and selecting the best real estate note-buying companies. Following these steps will help you confidently sell your real estate note for maximum financial benefit.

Real Estate

What are Real Estate Notes?

A real estate note is essentially an IOU (I Owe You) tied to the sale of a property. When you provide financing to facilitate a real estate transaction, the borrower signs a promissory note agreeing to repay the loan over time. This legal contract outlines details like:

  • loan amount
  • interest rate
  • payment schedule and
  • what happens if there are late or missed payments

The note simultaneously acts as an investment for you, the note holder, entitling you to monthly payments. However, sometimes circumstances change, and note holders want to liquidate this investment for cash funds.

In the above situation, you can sell your real estate notes to investors on the secondary mortgage market. Companies like Amerinote Xchange will purchase mortgage notes for competitive prices. This provides an influx of cash instead of receiving small monthly payments over an extended timeframe. Selling the note transfers ownership – and the right to receive payments – to the buying company.

Vetting Potential Note Buyers

When looking to sell your real estate note, it’s important to thoroughly research potential buying companies before agreeing to anything. Not all note buyers are created equal, so you want to find one known for fair prices and smooth transactions.

Research Company History

Start by looking into the company’s background and reputation. How long have they been in business buying and selling notes? Do they have a track record of satisfied sellers? Search online for reviews and complaints to gauge experiences. Feel free to ask for references from past note sellers as well.

Verify Professional Associations

Professional associations and licensing are also good indicators of a reputable company. Many states require licensing for note-buying activities. Look for buyers who belong to trade groups like the American Association of Private Lenders or the National Association of Mortgage Brokers.

Ask Detailed Questions Up Front

Ask prospective buyers detailed questions before providing personal information. A trustworthy company will be transparent about its practices. Inquire about their valuation methodology, fees, and how they handle servicing payments. If a buyer seems vague or unwilling to provide straight answers, consider that a red flag.

Questions to Ask Potential Note Buyers

When interviewing potential real estate note buyers, make sure to ask these key questions:

How Long Have You Been in Business?

An established company with years of experience buying and selling notes is ideal. This demonstrates they have the resources and knowledge to handle transactions smoothly.

What is Your Note Valuation and Pricing Methodology?

Understand how they determine value and make offers. Do they use proprietary models and algorithms or rely solely on expert judgment? Price should be based on tangible factors like property value and risk.

Do You Have References I Can Contact?

Reputable note buyers should be able to provide seller references upon request. Speaking with previous customers gives insight into their practices.

Are You Licensed to Buy Notes in My State?

Most states require licensing or registration to purchase notes. This helps protect note sellers through regulatory oversight. Make sure they are properly approved.

What Fees and Costs are Involved?

Ask for full written disclosure of any fees you may incur. This includes due diligence, processing, servicing fees, etc. Read the fine print carefully.

Choosing the Right Note Buyer for You

When it comes down to decision time, keep these tips in mind for identifying the best note buyer:

  1. Trustworthy buyers focus on long-term client relationships rather than quick profits. They want to keep sellers happy and build referrals.
  2. Reputation and transparency matter. Look for a well-reviewed company that is upfront about processes and fees.
  3. The highest bid may not be the best option. Make sure the buyer is legitimate, and the offer makes sense.
  4. Understand how and when you will be paid for your note. Quick closings and flexible payment options are ideal.
  5. Ask how servicing and collections will be handled after purchase. You want to minimize hassles.
  6. Seek out buyers who provide educational resources for sellers. They should help you understand the process.

Taking the time to thoroughly vet note buyers gives you confidence you are making the right choice when selling your valuable real estate note.


Selling a real estate note is a big financial decision. Make sure you do your homework when picking a buyer. Ask questions, check credentials, and look at offer details closely. Research and patience help you find the best buyer. This gets you the smoothest sale and best price. Simple steps lead to selling your note with confidence.

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