The question every seller-financed land note holder asks: "How much is my land note worth?" The answer depends on several factors. Most performing Texas land notes sell for 70-90% of the remaining balance.
Why Land Notes Sell at a Discount
When you sell a land note, you're selling future payments for a lump sum today. The buyer takes on risk and ties up capital. The discount is the difference between the remaining balance and what you receive. Understanding how land note discounts work helps set realistic expectations.
The 7 Factors That Determine Value
1. Interest Rate — Higher rates mean premium pricing (85-90%). Lower rates (below 8%) face larger discounts. The impact of interest rate is significant.
2. Payment History — 24+ months of perfect payments gets best pricing. Seasoning requirements vary, but more history is always better.
3. Down Payment — 20%+ down payment means lower risk and better pricing. We still buy notes with low down payments.
4. Balance and Term — Larger notes often get slightly better pricing. Small balance notes are still purchasable.
5. Property Type — Ranch land and residential lots price better than landlocked properties.
6. Documentation — Complete documentation increases value.
7. Note Structure — Deed of trust vs. contract for deed affects processing.
Want to know YOUR note's value? Call Sandy at (512) 861-0000 or submit your note details for a free quote in 24-48 hours.
Typical Discount Rates
Premium Notes (85-90%): 10%+ rate, 24+ months perfect history, 20%+ down
Standard Notes (75-85%): 8-10% rate, 12+ months history, 10-20% down
Below-Average (65-75%): Below 8% rate, limited seasoning, low down payment
Non-Performing (40-65%): Borrower not paying, requires foreclosure. See selling non-performing notes.
How to Increase Your Note's Value
Wait for more seasoning, gather all documentation, consider a partial sale, or sell to a direct buyer to avoid broker fees.
FAQ
Can I get 100% of my note's balance? No. Discounts are inherent to the secondary note market.
Do quotes expire? Yes, typically valid for 7-30 days.
What about taxes? See tax implications and consult a tax professional.
Your Next Step
Get a real quote. Call us at (512) 861-0000 or submit your note details. Within 24-48 hours, you'll have a written offer.