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Frequently Asked Questions
We are here to help. If you have any questions regarding what Panther Investments can do for you or would simply like to discuss seller financing, creative real estate, or any other related topic, please contact us at your convenience.
What is a note?
A note is a promise to pay money owed. It is a written document that lists a Payor (the person who owes the money) and a Beneficiary (the person receiving the payments). It also lists the terms of the agreement, such as the amount owed, interest rate, length of term, frequency of payments, etc.
What kinds of notes are there?
There are many types of notes that note investors deal with. The most common type of note is secured by residential real estate. Notes secured by commercial property or empty land are fairly common, also.
How long does the sale of my note take?
Once a price is agreed upon, it generally takes two to three weeks to complete the transaction and for you to get paid.
What is involved with selling a note?
First we gather all of the important information from you, usually over the phone. This information is then analyzed to find what your note is worth in today's dollars. We will either make you an offer ourselves or give you the best offer we receive from one of our many investors. Once you decide to proceed, we send you some papers to sign and a list of documents to gather for us, and that's it! You wait to receive your check.
In what ways can I sell my note?
Two methods stand out as being the most widely used. The first method is to sell the entire note (usually referred to as a Full sale). The other is what is called a "Partial" sale, where a note investor purchases X number of payments on the note. Then after the investor has received the X payments, the payments revert to you.
Why would I want to sell my note?
Probably the most attractive reason Sellers sell their note is the large lump sum of cash that they receive right away, rather than receiving small monthly payments. Think of the things that you could do with a sudden large amount of money. You could pay off existing debt, go on vacation, buy a new car, do some home improvement, pay or save for children's college, invest it into something else, etc.
In addition, there is no more worrying about the payments coming in (at least with a Full sale of your note). You don't have to concern yourself about whether or not the Payor is going to pay every month or if the property is in some way damaged or destroyed. It's out of your hands. Your only concern is what you are going to do with that lump sum of cash that you received.
How much does it cost me to sell my note?
Usually nothing. In most cases, the investor pays for the closing costs associated with the transaction.
Can I pull credit on the Payor of my note?
Section 604 of the Fair Credit Reporting Act states the "permissible purposes of consumer reports." Here you will find under what conditions it is permissible to request a credit report on a person. Subsection (a)(3) of subparagraph (E) states that any consumer reporting agency may furnish a consumer report to a person on someone that has an existing credit obligation to that person, for the use of valuation or an assessment of the credit or prepayment risks. A Note Holder may request a credit report on the Payor of his/her note for the purposes of valuation or the assessment of credit risks.
Taken from the Fair Credit Reporting Act: *
Subsection (a)(3) of Subparagraph (E)
§ 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b]
(a) In general. Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the following circumstances and no other:
(3) To a person which it has reason to believe
(E) intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation.
* The FCRA in its entirety can be viewed on the FTC web site here.
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© 2004 Panther Investments, Inc.