Posted by marla on March 23, 1999 at 18:21:30:
Thank you very much for the advise and heads-up to Bill! I, unfortunately, failed to mention in my post, here, that the property is in the Portland, Oregon area. (I clarified this in a later, duplicate post to the RE newsgroup at this site.)
I’ll see if I can find note buyers in the Portland Metro area to discuss this with. If you know any, I’ll certainly welcome the contact.
Again, thanks.
Marla
should I take a note as non-refundable option? - Posted by marla
Posted by marla on March 22, 1999 at 21:05:18:
After lengthy negotiations for the sale of a SFR on land to a developer, we’ve finally agreed on everything but the deposit/option_fee. The buyer’s offering a better than FMV price in return for my waiting 2-3 months longer than the usual 6-8 months for pay-off.
HOWEVER, he wants a free look-see for that period! He doesn’t want to have to come up with anything until after preliminary plat approval (~6-9 months) and then he wants to put up only a small promissory note. Neither of these is acceptable to me.
I’m looking for advise about whether or not to take a note secured by real estate (his or a partner’s) in lieu of a cash deposit, with the intent of selling it on the secondary note market if he backs out on the purchase of my property. (I’d just hold the note in escrow and execute it only if he backed out on the purchase.)
If I do take a note, how should I structure it for maximum appeal on the market? How much discount should I expect to give for a ~$60K unseasoned note? What else should I be looking at?
All advise/caveats welcomed!
TIA,
Marla (Santa Clara, CA)
Re: should I take a note as non-refundable option? - Posted by John Behle
Posted by John Behle on March 23, 1999 at 16:43:20:
You will likely have a hard time interesting a national buyer or funding source on this note. Find some local buyers and talk to them. Lay out what you are planning and see if they are a potential buyer and at what price and terms.
A note can be useless unless you have a potential buyer. In this scenario, I think you need a local buyer and need to work closely with them on how they want it structured.
I forwarded your message off to a note buyer in San Diego that is very professional and creative. I called him and he said he would have an interest. He’ll respond to you by email (his name is Bill Tan).