Real estate instruments can be bought, sold or traded. Seasoning of the contract is nice, but it's not important when other pertinent information is available. Sellers of real estate can also sell parts of their instruments or borrow dollars against them at anytime during the life of the debt. This sometimes works out best for the seller by taking care of immediate cash needs and still retaining a future value at a later date. A partial sale is in effect the same as borrowing against your instrument .

• A secondary market can be any viable purchaser of an instrument negotiated between a buyer and seller of real estate, either private investors or institutional investors. These investors purchase based on yields(internal rates of return). The calculations for these purchases are very similar to those used by investors in the bond market. The yields are established and defined by risks inherent to each individual instrument as follows:

• Rating the borrower. What is his financial strength? What is his record of meeting his bill paying obligations?

• Rating the property. What is the value of the property? What is the condition of the property? Will the property suffice in securing this debt?

• Location of property. The geographical location often has to do with it's marketability and inflationary/deflationary characteristics. The lower the risk to the investor, the lower the prescribed rate (yield requirements) and consequently the higher the price to the seller. Conversely, the higher the risk, the higher the yield, and lower the price to the seller.
  
  
• Because these calculations also take into consideration the functions of rates, time, and money, the earlier a dollar is returned to the investor, the more value it has. This means that negotiated interest rate, payments, and term of your note will also have great affect on the value your paper.