Chances are the pricing was hit by property value in one of three ways.

Home prices have dropped an average of 21% in the last three years, over 50% in some hard hit areas, and it plays a major role in how much a mortgage buyer will pay for an owner financed note.

Here’s a quick glance at what is happening around the country to home prices:

Median Sales Price for Existing Single Family Homes

2006                        2009                        Change

US                                    221.9                        173.2                        -21.9%

North East                        280.3                        240.7                        -14.1%

Mid West                         164.8                        142.5                        -13.5%

South                                 183.7                        154.6                        -15.8%

West                                  350.5                        224.2                        -36.0%

Source: Data Compiled from National Association of Realtors

So how do falling property values affect the pricing?

Big Reason #1 – Equity

When you go to sell payments on a mortgage, trust deed, or contract the note buyer wants to know today’s value of the property. This helps the investor see how much equity a buyer has in the home.

If the property value went down from the time the buyer purchased it means their equity decreased too. The lower the equity the more likely the buyer will go into foreclosure.

When an investor sees more risk they want more reward. Think of it like this:

More Risk

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It’s not a ridiculous question. As you read this, governmental agencies are actively working to eliminate all but the most basic form of owner financing without being a licensed mortgage originator.

Now industry leaders have joined efforts in the creation of an association to protect property owners, home buyers, and professionals in the seller-financed industry.

NAPPPR Mission Statement

The National Association to Protect Private Property Rights (NAPPPR) was created to preserve the rights of Americans to provide seller financing on property they own. The NAPPPR will work diligently to reach the following objectives:

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Here’s how to know if it’s a firm offer or just a soft quote when going to sell a private mortgage note.

Soft Quotes

A soft quote is an initial offer made by an investor without review of the buyer or payer’s credit. Credit plays a crucial role in pricing for both yield and investment to value (ITV) parameters on owner financed real notes. A quote without a credit review will likely be revised when credit is actually reviewed.

A soft quote is provided when only a Quote Request Worksheet is submitted without any supporting documentation. When there is no legal ability to pull credit and no indication of the payer’s credit status, the investor will often assume the best.

The quote will be

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This creative financing helps buyers purchase homes without traditional bank loans.

We also know that many sellers get tired of receiving installments and would rather have a lump sum of cash now. They seek out our services when they decide to sell their owner-financed mortgage, cash flow note, or land contract.

But what is seller financing?

If you are thinking it’s a trick question – you’re right. Seller financing and owner financing are just different names for the same thing. We often use the terms interchangeably.

Is one phrase used more often?

To answer this question we turned to Google, the powerhouse of Internet search engines. And, the results just might surprise you.

The clear people’s choice winner, by an overwhelming 5 to 1 lead, was… Owner Financing!

Here is an overview of the results based on monthly search volume for the following terms:

Owner Financing         135,000Owner Finance            110,000Owner Financed            74,000Seller Financing            27,100Seller Financed               8,100Seller Finance                 4,400

Source: Research obtained from https://adwords.google.com/select/KeywordToolExternal

The choice between owner versus seller is often based on where people live, but on average people across the US use some form of  “owner financing” over “seller financing”.

What do you say more often? Leave us a comment below to let us know your favored term along with the state you live in!

About the Author:  Tracy Z. Rewey has spent 20 years making money with owner financing.  All those hard earned lessons are shared in Personal Profit Series: Notes – The Complete Moneymaking System to Buying Referring, Creating, and Holding Real Estate Notes!

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Here’s a proven method you should be using, and it’s free!PPC is Expensive

If you are like most note buyers and cash flow brokers, you struggle with finding ways to increase the number of visitors to your website. While Pay Per Click (PPC) advertising is effective, it is also expensive and competitive. In fact one phrase, selling mortgage note, currently has an estimated average Cost Per Click (CPC) of $14.73 based on the Google keyword analytics tool.

Search Engines are Competitive

Hoping to rely on organic search results can be even tougher. There are over 1,390,000 results for that same phrase of selling mortgage note. Good luck showing up on the first page without a lot of time and expert Search Engine Optimization (SEO) know-how.

So, how can individual note buyers and brokers compete for Internet traffic?

Try Article Marketing!

You don’t have to be an English scholar or famous author to submit articles. You do need original content, knowledge on your subject, and a passion for sharing information.

For the past year we’ve been using EzineArticles.com to publish our articles on buying and selling mortgage notes. This has led to over a 20% increase of traffic directly attributable to this one article site. While they are not the only online article publisher, they are one of the largest and most recognized with millions of unique visitors each month.

Here are some of the benefits of online article marketing:

Increased Visitors

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Discover why this bad mortgage crisis increases demand for seller financing and opportunity in the cash flow note business.

The Crisis

You can’t pick up a newspaper or watch the news without hearing about the increase in foreclosures. Last year 1 in every 45 homes in the U.S. received a foreclosure filing.

And the trend isn’t over yet. The first quarter of 2010 saw a 7 percent increase from the last quarter of 2009. (Source: Press Release from RealtyTrac.com)

The Challenge

Foreclosures are tough all around. They decrease property values, tighten lending requirements, and devastate the lives of displaced families.

So what happens when all these homeowners try to put the pieces of their lives back together and purchase another home?

Foreclosures stay on a credit report for up to seven years. A foreclosure in this market means a substantial loss to the bank, so they are unlikely to grant a new home mortgage loan anytime soon.

The Solution

When banks say

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But there are some notes and land contracts that just don’t make good investments. Save yourself time and marketing dollars by knowing the three notes that investors just aren’t that into.

1. Second Position

Investors want to be first in line to receive payment. When they buy a second lien they are standing in line behind the first mortgage. If payments are missed and there is a foreclosure the investor is going to get what’s left over after covering the first. That’s not much in today’s market of over supply and declining values.

In past years an investor might have made an offer of fifty cents on the dollar for a second note with some decent seasoning, equity, credit, and first to second ratio. Right now, they are just saying,

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But what options are there for notes when a balloon is due but the buyer can’t refinance? Should the seller consider extending?

Here’s a look at a common dilemma facing sellers and note brokers. (Note: The specific details were modified for privacy protection.)

Dear Note Investor,

I was approached with a balloon payment mortgage note now due after 5 years of payments

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Therefore, if you have existing mortgages and have been disqualified for a bank loan, check out with the owner of the property you wish to buy and see if you can avail this type of financing. With a substantial income, this type of financing is always better as you can pay off the loan in a shorter period of time without filing an application with the bank for a loan. Closing costs are also considerably lowered with owner financing. As a buyer, you also get the benefit of keeping your personal and financial history in complete secrecy with this financing.

If you are serious about buying the property of your choice through owner financing, it is suggested that you search the Internet or the yellow pages for a good real estate agent who can show you property that is available owner financed. A good real estate agent is just the one who can help you with all the financing queries and get you a nice property in a great location. Believe it or not, owner financing is an incredible concept today and has earned lot of fame in the real estate industry.

Roland Poitevin is a dedicated writer with a passion for business and environmental issues. You can check out his new website at Gun Safes which helps people find the The Best Gun Safes Available and information they are looking relating to this subject.

Article Source: http://EzineArticles.com/?expert=Roland_Poitevin

Have You Been Refused a Mortgage? Owner Financing May Be the Way to Do It!

There are many of us who do have a good enough source of income and wish to buy property; however, we do not qualify for a loan. There may be many reasons for the same. You may have been denied loan because you started a new business or are going through a divorce. You can even be disqualified for a bank loan if you have changed your job or have moved to a new location. Do not be worried by it. Now you have the option to avail owner financing! Yes, owner financing can help you buy property without having to go to the bank. Owner financing is a new form of financing that allows the owner of a property to provide partial or total finance to the buyer.

Therefore, if you have existing mortgages and have been disqualified for a bank loan, check out with the owner of the property you wish to buy and see if you can avail this type of financing. With a substantial income, this type of financing is always better as you can pay off the loan in a shorter period of time without filing an application with the bank for a loan. Closing costs are also considerably lowered with owner financing. As a buyer, you also get the benefit of keeping your personal and financial history in complete secrecy with this financing.

If you are serious about buying the property of your choice through owner financing, it is suggested that you search the Internet or the yellow pages for a good real estate agent who can show you property that is available owner financed. A good real estate agent is just the one who can help you with all the  financing queries and get you a nice property in a great location. Believe it or not, owner financing is an incredible concept today and has earned lot of fame in the real estate industry.

Article Source: http://EzineArticles.com/?expert=Roland_Poitevin