ADVANTAGES OF SELLING on a Private Note and Deed of Trust/Contract

• Faster closing. No need to wait for appraisals, committee decisions, financial approvals.
  
• No institutional qualifying of purchasers.
  
• No need to upgrade properties to qualify.
  
• Better rate of return on your money. Typical rates on real estate instruments are usually much higher than those of bank savings accounts or CD's.
  
• Down payments are not required (you may, however, want to require one for yourself and your protection).
  
• Terms can be customized to meet the needs of both buyer and seller.
• There may be some valuable tax considerations. (consult your CPA or tax advisor).
• Liquidity-These are negotiable instruments, so you can get a good return on your money now and sell for cash, borrow against them when you want or need.
• Higher value-Because the purchaser does not need to qualify for a standard mortgage, pay points, appraisal fees, loan fees, inspection charges ect. You can often sell on a private instrument for higher than a cash price.

VERY IMPORTANT CONSIDERATIONS
When privately financing a sale
"always pretend you are the bank"

• Get a complete financial statement on your purchasers, including social security numbers.
• Get a credit report on the purchasers.
• Check with your CPA or tax advisor regarding tax benefits or complications.
• Have your attorney review any documents you are about to sign.
• Close your transactions through an attorney, escrow agent or title insurance company and be sure to record your resulting instrument.
• Check the market (secondary mortgage broker) to get an idea of the value of the instrument you are about to create. There are certain items that can greatly affect the value of your instrument if you decide to sell now, or at a later date.
• Keep a good payment record on your paper. Do it yourself or have it collected by a qualified contract collection agency, or your bank. Many provide this service for a nominal charge, and they will keep your important papers for delivery upon satisfaction of your debt instrument. In addition, they will supply valuable monthly and year end statements for tax purposes.

Realtors:
TO LIST OR NOT TO LIST

Listing a property gives you market exposure and isolation from potential purchasers plus (as long as you choose wisely) the help of an expert in the field of selling real estate. The cost of hiring a Realtor is usually 7% to 10& of the selling price of the property, with more expensive and commercial properties listed on a negotiated basis.

If the property is not listed, the market often assumes that the seller has at least 7-10% worth of padding in the price and will discount accordingly. This means that the actual cost of hiring a Realtor can well be zero. Better yet, their additional marketing expertise and knowledge can often produce more net dollars and faster results than if the property had not been listed.