Posted by Rich Hyams on April 11, 2004 at 20:20:53:
My neighbor had over 60 liens and judgments on their property. A dopey real estate agent bought the house for 190k thinking she was cool. She bought it the Friday before Mondays foreclosure sale. Moronicly, she had no idea of the extent of the liens and judgements. She spent 35k geting rid of the liens and they never left the house and never paid her a dime in rent, they were there for six months, she sold the house for 240k, she told me she lost less than 10k and the frustration got her out of any notion of REI ever again.
– Can anyone please explain what is a real-estate note? –
Sure, A note is basically an IOU. It says you will pay the lender back. You can have a note on anything, cars, boats, houses, commercial equipment, airplanes, etc. When you buy a house, a few things are traded. The lender brings MONEY to pay off the seller. You in return give the lender two things. You give a NOTE (the IOU) and also a MORTGAGE or TRUST DEED (depending on your state). Basically the NOTE says you will pay the loan back, and the MORTGAGE or TRUST DEED says you have pledged the house as collateral, meaning if you don’t pay the NOTE as agreed, the lender can take the house.
Posted by Randy (SD) on April 11, 2004 at 10:56:17:
Private mortgage. If I sell you a property and agree to carry some of the financing that is a note. There are many versions of notes, it can be a seller financed first position lien, a second lien, a realtor may agree to except their commission or a portion thereof at a later time, they will secure payment in the form of a note. Notes are recorded as liens on the property and ultimately must be satisfied in order to convey a clear title to the owner or a new owner.
Thank you very much. Here, in Israel, seller finance and second notes are not acceptable. Also, we have no brokers here, the mortgages are given by banks or insurance companies only. They do not allow additional credit on the property in most of the cases.