Looking for quick answer
Are there any closing costs or transfer taxes associated with the purchase of a note?
The paperwork ($150-$500 from an attorney) and filing fees ($20-$50).
I guess if you wanted to close it at a title company there would be an escrow fee.
I've never done an actual "closing" for a note purchase. After verifying clear title, I get an assignment of deed of trust and the note, and they get a check or vice versa if I'm selling it.
The typical costs associated with purchasing a note are pulling the credit report: $15-$35. Appraisal: $350-$400 Title Insurance: $1,200. Recording: $75. These should get you close in most areas.
Interesting. I didn't realize that one needed to get an appraisal also when buying a note.
If you dont do an appraisal on the property, how do you know that the property is worth the value that you decide to pay for the note?
The one I am not sure about would be the Title insurance. Since most notes contain a clause about insurance it seems like all you have to do is also transfer the benefited party and keep the policy in force.
Originally posted by jawsette:
If you dont do an appraisal on the property, how do you know that the property is worth the value that you decide to pay for the note?
I figured--perhaps incorrectly--that note buyers basically used an income analysis to determine the value of a note.
An income analysis would be fine, but if the payor were to default, would you want the debt amount secured by something that is not worth at least the value of that debt?