Buying 1st Note - What does seller sign? - Posted by SteveCtx

import · October 8, 2009, 1:11pm

Posted by Marc Faulkner on October 10, 2009 at 09:57:41:

First you would sign a Purchase Agreement and then an assignment. Make sure to get a proper endorsement by having the seller write, “Pay to the order of YOU” and signing on the back of the Promissory Note. Yes I would use your favorite title company to close the transaction and make sure you get a lenders title policy.

import · October 8, 2009, 1:11pm

Posted by SteveCtx on October 08, 2009 at 13:11:08:

Hey folks, I normally just buy houses but found a house with a discountable note. I’m working with the note holder to pay off a $60k note for $30k on a $100k house. There’s other intricacies here, but if I want buy the note, what is the first form I need him (note holder) to sign? Obviously not a payoff but is it an assignment of note or what?

I presume that paperwork is taken to my favorite Title Company and closed … correct?

Thanks for the comments.
Steve

import · October 15, 2009, 8:31am

Re: Buying 1st Note - What does seller sign? - Posted by Tom Henderson

Posted by Tom Henderson on October 15, 2009 at 08:31:52:

The first “form” is a contract to purchase the note. The endorsement of the note and assignment of the security instrument will be done at the closing table.

However, you are not near ready for this stage. There are other “intricacies” involved in purchasing a note, but from your standpoint, you want to make sure there are no other liens prior to yours, the note has not been purchased or hypothicated etc. When you close at the title company, demand a lender’s policy. The lender’s policy will make you aware of any time bombs. After you are comfortable the note is valid and legit, you will then take over the position of the note holder.

On the other hand, if the goal is to purchase the house, and the note holder has agreed to a discounted purchase price (short sale), why not just purchase the property with the note holder giving a $30K payoff. This can also be in the form of a contract. This way there is no need to purchase the note, you merely purchase the property via an “owner fiancing short sale”.

Hope this helps.

Tom Henderson