Sell Land Note: Broker vs Direct Buyer in Texas | Complete Guide

When you decide to sell your land note in Texas, one of the first decisions you'll face is whether to work with a note broker or sell directly to a buyer. This choice can mean the difference of thousands of dollars in your pocket and weeks or even months in your timeline. After 42 years of buying land notes across all 254 Texas counties, I've seen sellers make both choices—and I've witnessed firsthand how dramatically the outcomes can differ.

The note industry has changed significantly over the decades. When I started buying seller-financed notes back in the early 1980s, most transactions went through brokers because finding a direct buyer was nearly impossible for the average note holder. Today, the internet has changed everything. You can research direct buyers, compare offers, and close deals without ever paying a broker commission. But that doesn't mean brokers don't have their place—they do, in certain situations.

In this comprehensive guide, I'll walk you through exactly how both options work, what you'll pay in each scenario, how long each process takes, and most importantly, how to determine which path is right for your specific situation. Whether you're holding a performing note worth six figures or a smaller balance note you want to liquidate quickly, this guide will give you the information you need to make the smartest decision.

Understanding Note Brokers: What They Do and How They Work

A note broker is essentially a middleman in the note-selling process. They connect note sellers with note buyers and earn a commission for facilitating the transaction. In theory, a good broker should bring value by having relationships with multiple buyers, understanding note valuation, and handling paperwork. In practice, the value they provide varies enormously.

Here's how the typical broker transaction works: You contact the broker with your note details. They collect information about your note—the property address, remaining balance, payment amount, interest rate, payment history, and borrower information. Then they shop your note to their network of buyers, collect offers, and present you with what they claim is the best deal available.

What many sellers don't realize is that the broker's incentive isn't necessarily aligned with yours. Brokers typically earn 2-8% of the transaction value as their commission. Some brokers quote you a "net" price and keep the spread between what the buyer actually pays and what you receive. Others charge a transparent percentage. Either way, you're paying for their services—and those costs add up quickly on larger notes.

For example, on a $50,000 note, a 5% broker commission is $2,500 that comes directly out of your proceeds. On a $100,000 note, that same percentage takes $5,000 from your pocket. Before working with any broker, you need to ask yourself: is the service they're providing worth that much money?

There are scenarios where a broker might add value. If you have an extremely complex note with unusual terms, multiple properties, or legal complications, a experienced broker with specialized knowledge might navigate those waters better than you could alone. If you have absolutely no time to handle the sale yourself and money isn't your primary concern, a broker can save you time. But for the vast majority of straightforward Texas land notes, working directly with a buyer is the smarter financial choice.

How Direct Note Buyers Work: The Straightforward Alternative

A direct note buyer is exactly what the name suggests—a company or individual that purchases notes with their own capital, for their own portfolio. There's no middleman, no commission to split, and no broker markup on the price. When you work with a direct buyer, every dollar of the purchase price goes to you.

At Longhorn Money Services, we've been buying notes directly for over four decades. Here's how our process works: You submit your note details through our website or give us a call. We review the information and provide you with a quote—usually within 24 hours. If you like the offer, we move forward with due diligence, title work, and closing. The entire process typically takes 2-3 weeks, though we can close in as little as 7 days for urgent situations.

The key advantage of working directly is transparency. When we make you an offer, that's exactly what you'll receive at closing (assuming the note details verify correctly). There are no hidden fees, no processing charges, and no commissions deducted from your proceeds. The offer we quote is the check you'll receive.

Direct buyers also tend to be more flexible than brokers. Because we're investing our own money, we can make decisions quickly and accommodate unusual situations. Need to close by a specific date? We can probably make it happen. Have a note with some payment issues? We buy those too. Looking to sell just part of your note? We can structure that. When you work with a direct buyer who has capital ready to deploy, flexibility comes standard.

Another benefit that sellers often overlook is the relationship aspect. When you work with a broker, you're one of many notes they're trying to sell. When you work with a direct buyer, you're dealing with the actual decision-maker. You can ask questions directly, get immediate answers, and build a relationship that might serve you well if you have additional notes to sell in the future.

The Complete Fee Comparison: Broker vs Direct Buyer

Let's get specific about what you'll pay in each scenario. This is where the broker versus direct buyer decision becomes crystal clear for most sellers.

Broker Fees and Costs:

Commission: Typically 2-8% of the transaction value, though some brokers charge even more. On a $75,000 note at 5% commission, you're paying $3,750. Some brokers structure this as a flat fee, but the percentage model is more common.

Processing Fees: Many brokers charge additional processing or administrative fees ranging from $200-$500. These might be called "documentation fees," "processing fees," or "transaction fees." Whatever the name, it's more money out of your pocket.

Hidden Spreads: Some brokers operate on a "net" pricing model where they quote you one price but actually sell your note for more. The difference—which could be 3-10% or more—is their hidden profit. This is legal but not always disclosed clearly.

Total Broker Costs: Realistically, working with a broker can cost you 4-12% of your note's value when you add up all the fees and spreads. On a $50,000 note, that's $2,000-$6,000. On a $100,000 note, that's $4,000-$12,000.

Direct Buyer Fees and Costs:

Commission: Zero. Direct buyers don't charge commissions because there's no middleman to pay. The offer you receive is the amount you'll get.

Processing Fees: Legitimate direct buyers don't charge processing fees to sellers. At Longhorn Money Services, we never charge sellers any fees—period. We make our money on the investment side, not by nickel-and-diming note sellers.

Hidden Costs: With a reputable direct buyer, there are no hidden costs. The quote you receive is the check you'll get, assuming your note details verify correctly during due diligence.

Total Direct Buyer Costs: Zero out-of-pocket costs. The offer amount is your net proceeds.

When you compare these numbers side by side, the advantage of selling direct becomes obvious. A seller with a $60,000 note who uses a broker charging 5% commission plus $300 in fees gives up $3,300. That same seller working with a direct buyer keeps that $3,300 in their pocket. Over the course of a year, we see sellers walk away with thousands of extra dollars simply by choosing a direct buyer over a broker.

Timeline Comparison: How Long Each Process Takes

Time is money, and when you're selling a note, the clock matters. Whether you need cash quickly for an opportunity or simply want to wrap up a transaction efficiently, understanding timelines helps you plan accordingly.

Broker Timeline:

Initial contact and information gathering: 1-2 weeks. Brokers need time to collect all your note details, often requiring multiple calls and document submissions because they need to package your note attractively for potential buyers.

Shopping the note to buyers: 1-4 weeks. This is where brokers theoretically add value—shopping your note to multiple buyers. In reality, most brokers have 3-5 regular buyers they work with, and the "shopping" process often means sending a few emails and waiting for responses.

Negotiation and offer presentation: 1-2 weeks. Once offers come in, the broker negotiates on your behalf (or claims to) and presents you with options.

Due diligence and closing: 3-6 weeks. After you accept an offer, the actual buyer still needs to do their due diligence. Since the buyer doesn't have a relationship with you, this process often takes longer as everything filters through the broker.

Total Broker Timeline: 6-14 weeks is typical, though complicated notes can take much longer. I've seen broker transactions drag on for 4-6 months when issues arise.

Direct Buyer Timeline:

Initial contact and quote: 1-3 days. When you contact a direct buyer like Longhorn Money Services, we can usually provide a preliminary quote within 24 hours. You submit your information, we review it, and we give you a number. Simple.

Due diligence: 1-2 weeks. Once you accept our offer, we verify the note details, review documents, and order title work. Because we're the actual buyer and we've been doing this for 42 years, our due diligence process is efficient and streamlined.

Closing: 1-2 weeks. After due diligence confirms everything, we schedule closing, prepare documents, and transfer funds. Many closings happen at a local title company or via mobile notary for your convenience.

Total Direct Buyer Timeline: 2-4 weeks for most transactions. For urgent situations, we've closed in as little as 7 days. The record was a seller who needed cash for a medical emergency—we closed in 5 business days.

The timeline difference isn't just about patience—it's about the time value of money. If you need $50,000 and it takes 12 weeks with a broker versus 3 weeks with a direct buyer, that's 9 weeks where your money is sitting on the table instead of working for you. For sellers who need cash for time-sensitive opportunities, this difference is enormous.

Net Proceeds Analysis: What You Actually Take Home

At the end of the day, one number matters more than any other: how much money will you actually receive? Let's run through a realistic example to illustrate the broker versus direct buyer difference.

Example Note:

Remaining Balance: $80,000
Interest Rate: 8%
Monthly Payment: $700
Remaining Term: 15 years
Property: 10 acres in Hill Country, Texas
Payment History: 24 months of on-time payments
Borrower Credit: Fair (650 score)

Scenario 1: Selling Through a Broker

The broker shops your note and receives offers. The highest offer from a buyer is $62,000 (77.5% of balance, reasonable for this note profile). The broker quotes you $58,000 "net" to you. Here's how that breaks down:

Actual buyer offer: $62,000
Broker spread/commission: $4,000 (6.4%)
Processing fee: $350
Your net proceeds: $57,650

You might think you're getting $58,000, but after that processing fee, you're at $57,650. That's 72% of your remaining balance.

Scenario 2: Selling to a Direct Buyer

You submit your note details to Longhorn Money Services. We review the information and offer you $61,000. Here's that breakdown:

Our offer: $61,000
Commissions: $0
Fees: $0
Your net proceeds: $61,000

That's 76.25% of your remaining balance—and $3,350 more than the broker scenario.

Why the Difference?

The direct buyer can often pay more than what a broker can net you because there's no middleman taking a cut. Our $61,000 offer is actually less than the $62,000 the buyer offered in the broker scenario—but you walk away with more money because there are no fees eating into your proceeds.

This is the fundamental math that makes direct note buyers the better choice for most sellers. Even when a broker claims to get you the "best price," the fees and commissions often eliminate that advantage and then some.

When Might a Broker Actually Make Sense?

I've spent most of this article explaining why direct buyers are usually the better choice, but I want to be fair and acknowledge the scenarios where a broker might add genuine value. They're rare, but they exist.

Extremely Complex Notes: If you have a note with multiple properties as collateral, unusual legal structures, participation agreements, or complicated subordination issues, a broker who specializes in complex notes might navigate those waters more efficiently. Most land notes don't fall into this category, but they exist.

Institutional-Size Notes: If you're selling a note or portfolio worth several million dollars, the market dynamics change. Brokers who work with institutional buyers might access capital sources that smaller direct buyers can't match. For notes under $500,000—which covers the vast majority of Texas land notes—this doesn't apply.

Completely Passive Sellers: If you genuinely cannot spend any time on the sale process—perhaps due to health issues, travel, or other constraints—and you're willing to pay thousands of dollars for someone else to handle everything, a broker provides that service. But consider whether a direct buyer who makes the process simple anyway might achieve the same result at no cost.

Notes in Other States: If you have notes in states outside Texas and want a single broker to handle them all, that consolidation might have value. For Texas land notes specifically, working with a Texas-focused direct buyer who knows the local market inside and out is typically advantageous.

For the typical Texas land note holder—someone with a straightforward seller-financed note who wants to convert future payments to cash—the direct buyer route wins on price, speed, and simplicity in nearly every case.

How to Find Reputable Direct Buyers in Texas

If you decide that selling directly is the right choice (as most sellers do after understanding the math), you need to find a trustworthy direct buyer. Unfortunately, not everyone who claims to be a "direct buyer" actually is. Here's how to separate the legitimate buyers from the pretenders.

Verify They Buy With Their Own Capital: A true direct buyer uses their own money to purchase notes. Ask directly: "Do you buy notes with your own funds, or do you broker them to other buyers?" Legitimate direct buyers will confirm they're investing their own capital. Brokers posing as direct buyers will dodge or equivocate.

Check Their Track Record: How long have they been in business? Do they have verifiable reviews or references? At Longhorn Money Services, we've been buying notes in Texas since 1982—over 42 years. That longevity matters because it proves we've survived multiple real estate cycles and maintained our reputation through good times and bad.

Ask About Their Process: Reputable direct buyers have a clear, efficient process. We've refined ours over thousands of transactions. If a buyer can't clearly explain how their process works from initial quote to closing, that's a red flag.

Evaluate Their Communication: When you reach out, are you talking to a decision-maker or a call center? Direct buyers typically have smaller teams where you'll work with people who can actually make decisions. If you're being passed around to multiple departments before getting basic questions answered, you might be dealing with a broker in disguise.

Review the Offer Details: A legitimate direct buyer will provide a clear offer in writing, specify exactly what you'll receive at closing, and not surprise you with fees or deductions later. Any buyer who's vague about numbers or adds fees after the initial quote deserves skepticism.

Taking time to vet your buyer is worth the effort. The good news is that with a little due diligence, finding a reputable direct land note buyer in Texas isn't difficult. The state has several established buyers, and we're proud to be among the most experienced.

Questions to Ask Any Note Buyer or Broker

Whether you're considering a broker or a direct buyer, asking the right questions protects you and helps you make an informed decision. Here are the questions I recommend every note seller ask:

1. Are you a direct buyer or a broker?
This is the fundamental question. Get a clear answer. If they say "both" or try to explain a complicated structure, they're likely primarily a broker.

2. What fees will I pay?
Ask for a complete list of any fees, commissions, or costs that will be deducted from your proceeds. A direct buyer like Longhorn Money Services will say "zero"—and mean it.

3. Is your quote the actual amount I'll receive at closing?
The answer should be yes, assuming note details verify correctly. If there are contingencies or potential adjustments, understand what they are upfront.

4. How long have you been in business?
Experience matters in this industry. Look for buyers with at least 10-15 years of track record, preferably longer.

5. How quickly can you close?
Understand typical timelines and whether expedited closings are possible if you need speed.

6. What documents will you need from me?
Professional buyers know exactly what they need and can provide you a clear list. If they're vague, they may not be as experienced as they claim. Review our guide on documents needed to sell your land note for a comprehensive overview.

7. Do you buy notes in my specific county/area?
Some buyers have geographic limitations. At Longhorn Money Services, we buy land notes in all 254 Texas counties—from downtown Houston to remote West Texas.

8. Can you provide references?
Established buyers should have satisfied sellers willing to share their experience. Be cautious of buyers who can't provide any references.

The Direct Buyer Process: Step by Step

Understanding exactly how selling to a direct buyer works removes uncertainty and helps you prepare. Here's the typical process when you work with Longhorn Money Services, which is similar to other reputable direct buyers.

Step 1: Submit Your Note Information
You provide basic details about your note: remaining balance, interest rate, monthly payment, property description, and payment history. This can be done online or over the phone. The more accurate your information, the more precise our initial quote will be.

Step 2: Receive Your Quote
We review your information and provide a preliminary offer, typically within 24 hours. This quote is based on the information you've provided and represents what we're prepared to pay assuming everything verifies correctly.

Step 3: Accept the Offer
If our quote works for you, you let us know you want to proceed. There's no commitment or obligation when you receive a quote—take your time to consider it and compare to other options if you wish.

Step 4: Submit Documentation
We'll request copies of your note documents—the promissory note, deed of trust, payment history, and any other relevant paperwork. You can typically submit these digitally for faster processing.

Step 5: Due Diligence
We verify the information, review the documents, order a title report, and confirm the note's status. This is where we make sure everything matches what you've told us. Any discrepancies would be discussed with you immediately.

Step 6: Prepare Closing Documents
Once due diligence is complete, we prepare assignment documents, closing statements, and anything else needed for the transaction. We use title companies and closing attorneys experienced with note transactions.

Step 7: Close and Get Paid
Closing can happen at a title company, via mobile notary at your location, or even entirely by mail depending on your preference. Once documents are signed and recorded, funds are wired to your account—typically the same day or next business day.

The entire process from first contact to money in your account typically takes 2-3 weeks. For sellers who need to sell their land note fast, we can often expedite to 7-10 days.

Real Seller Experiences: Broker vs Direct

Over 42 years, I've talked to thousands of sellers. Many came to us after trying the broker route first. Here are some common experiences they've shared:

The Waiting Game: "I sent my note info to a broker in January. It's now April and I still don't have my money. They keep saying the buyer needs more information or the deal is 'almost done.' I finally called Longhorn, got an offer in two days, and closed in three weeks."

The Surprise Fees: "The broker told me I'd get $45,000 for my note. At closing, there was a $2,800 'processing fee' and some other charges I don't even understand. I ended up with $42,000—way less than they promised. When I sold my other note directly, the offer was the exact amount I received."

The Communication Void: "I couldn't get my broker to return calls. I'd leave messages and wait days for a callback. When I started talking to direct buyers, I was amazed that the owner himself called me back within a few hours. That's when I realized brokers don't value my business the same way."

The Lowball Then Adjust Trick: "The broker got me three offers and recommended the highest one—$55,000 from some company I'd never heard of. We started the process, but then the buyer came back and said they could only pay $48,000 after their 'due diligence.' The broker told me to take it since we'd already started. I walked away and sold to a direct buyer for $52,000 with no games."

These aren't isolated incidents—they're patterns I see repeatedly. That's not to say all brokers are bad; some genuinely try to help their clients. But the structural incentives in brokering create problems that simply don't exist when you work with a direct buyer.

Common Misconceptions About Note Brokers and Direct Buyers

Let me address some myths I hear frequently:

Myth: Brokers get you the best price because they shop to multiple buyers.
Reality: Competition among buyers can sometimes help, but broker fees typically eat up any premium they might achieve. A direct buyer paying 95% of market value with zero fees almost always beats a broker getting you 100% of market value minus 8% in commissions.

Myth: Direct buyers lowball because there's no competition.
Reality: Reputable direct buyers price notes fairly because their reputation depends on it. At Longhorn Money Services, most of our business comes from referrals—we can't afford to lowball sellers. Plus, nothing stops you from getting quotes from multiple direct buyers and choosing the best one.

Myth: The broker's experience means a smoother process.
Reality: An experienced direct buyer has just as much—usually more—experience with note transactions. We've been doing this for 42 years. Our process is refined through thousands of closings.

Myth: Brokers are required for complex notes.
Reality: Most notes aren't that complex, and many direct buyers specialize in handling unusual situations. We've bought notes with all kinds of complications—payment issues, title questions, subordinate liens—without needing broker involvement.

Myth: You need a broker to handle paperwork.
Reality: Any professional direct buyer handles all necessary paperwork. We prepare assignments, coordinate with title companies, and ensure proper recording. You sign documents; we do the work.

Making Your Decision: A Framework

To summarize everything we've covered, here's a simple framework for deciding between a broker and direct buyer:

Choose a Direct Buyer If:

• You want to maximize your net proceeds
- You want to close within weeks rather than months
- Your note is relatively straightforward
- You value transparent pricing with no hidden fees
- You want to work with experienced decision-makers
- Your note is $500,000 or less in remaining balance

Consider a Broker If:

• Your note has highly unusual or complex terms
- You're selling a portfolio worth several million dollars
- You physically cannot participate in the selling process
- You've gotten quotes from multiple direct buyers and believe a broker can beat all of them even after fees

For the vast majority of Texas land note holders, direct buyers offer a better outcome on every metric that matters. If you're reading this article because you have a land note you're thinking of selling, I encourage you to at least get a quote from a direct buyer before committing to a broker. You might be surprised how favorably it compares.

Frequently Asked Questions

What's the typical difference in proceeds between using a broker and selling direct?
Based on our experience, sellers typically net 4-10% more by selling direct versus using a broker. On a $75,000 note, that's $3,000-$7,500 more in your pocket. The exact difference depends on the broker's fees and whether they use transparent pricing or hidden spreads.

How do I know if someone is a true direct buyer or a broker in disguise?
Ask them directly: "Do you purchase notes with your own funds for your own portfolio?" Legitimate direct buyers will confirm they do. Also ask about fees—true direct buyers don't charge sellers commissions or processing fees. If they're vague about either question, they're likely a broker.

Can I get quotes from both brokers and direct buyers to compare?
Absolutely, and I recommend it. Getting multiple quotes helps you understand your note's market value and ensures you're getting a fair deal. Just make sure you're comparing net proceeds—what you'll actually receive after all fees—not just quoted prices.

Why would anyone use a broker if direct buyers are better?
Sometimes sellers don't know direct buyers exist—brokers market heavily while direct buyers often rely on referrals. Other times, sellers have unusual notes that benefit from broker specialization. And occasionally, sellers simply don't want to invest any effort in the process and are willing to pay for convenience.

How quickly can a direct buyer close compared to a broker?
Direct buyers typically close in 2-4 weeks, while broker transactions often take 6-14 weeks or longer. At Longhorn Money Services, we can close urgent situations in as little as 7 days when sellers need fast cash.

Does Longhorn Money Services charge any fees to sellers?
No. We never charge commissions, processing fees, or any other costs to sellers. The offer we make is exactly what you'll receive at closing, assuming your note details verify correctly during due diligence.

What if a broker already showed my note to buyers?
If you've already signed an exclusive agreement with a broker, review its terms—there may be a time limit or cancellation provision. If the agreement has expired or you never signed one, you're free to work with anyone. Many sellers come to us after broker relationships don't work out.

Making the Smart Choice for Your Land Note Sale

The choice between a note broker and a direct buyer comes down to simple math for most Texas land note sellers. Brokers add a layer of cost—through commissions, fees, and hidden spreads—that directly reduces your proceeds. Direct buyers eliminate that layer, putting more money in your pocket faster.

After 42 years of buying land notes across Texas, I've seen thousands of sellers make this choice. The ones who sell directly consistently end up happier with their outcomes. They get competitive prices, close quickly, and keep every dollar of their proceeds.

If you have a land note you're considering selling, I invite you to experience the direct buyer difference for yourself. Get a free quote from Longhorn Money Services and see exactly what your note is worth—no brokers, no fees, no obligation. We buy land notes in all 254 Texas counties and have the capital to close deals of any size.

You worked hard to build your note. You deserve to get the maximum value when you sell it. Don't let broker fees take thousands out of your pocket when a direct buyer can put that money where it belongs—with you.