A Note Appraisals is a useful for estate planning, financial planning, and division of assets (in the case of divorce proceedings or estate settlement).
A Note Appraisal is an estimation of the current worth of a Mortgage, Land Contract, Trust Deed, or other cash flow performed by an experienced buyer, seller or broker of notes.
A Note Appraisal uses the "present value" approach to valuing a cash flow."Present value" is defined as the sum of all future benefits accruing to the holder when such benefits are discounted to the present by an appropriate discount rate or yield.
What this could mean to the Note Broker: This means knowing before hand if the note is a worthwhile investment or not to your buyer(s) or not. By simply taking the time to have the note appraised will give you the tools and I believe the opportunity to inform your client(s) if it is indeed a sell-able note, and if so a price range her/she/they could expect. Not to mention if you see below, you will have all the documents you will need to present to your buyer(s) if indeed the note is sell-able.
What this means to the Note Holder: With knowledge of what your note is worth before hand as well as if it is sell-able or not, gives you the option to make a more informed decision, whether as to sell the note now, or latter, and what price range to include a minimum and a maximum amount you could expect.
Some note appraisers offer this service for a fee between $100 to $500 depending on the note. As well as some note appraisers such as Note Financial Services will, not only appraise the note but if given the opportunity to buy the note will wave the fee.
A note appraisal could take anywhere between 2 to 5 days depending on the note, as well as the information provided.
Note values are affected by several factors:
- Security of the investment – what is the property’s condition? Is it appreciating or depreciating? How likely is it that the note will continue to be current and timely?
- Terms of the note – length remaining, interest rate, any balloons, or payoff clauses – all affect the present value of the note.
- Loan to Value ratio – what is the loan balance to value of property ratio? What was the down payment?
Information Needed For a Note Appraisal:
1.Copy of security document.
2.Title and Escrow Company w/policy number (If available)
3.Property insurance information (If available)
Just click the Here to have you note appraised.
Links of interest for Note Brokers, Buyers, Sellers:
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I welcome any and all comments that you may have, and I look forward to networking with you
Sincerely,
Corey Bell
Note Financial Services