Note sellers ask me some version of the same question almost every week. "Are you the one buying my note, or are you going to shop it to someone else?" It is a smart question. The answer changes how much you get, how fast you get it, and how likely the number is to hold up.
I run a direct note buying company, so I am not neutral. But brokers have their place too, and I will tell you when one makes sense.
What is the difference between a direct land note buyer and a note broker?
A direct buyer pays you with its own money. A broker finds someone else to pay you and keeps a piece.
A direct land note buyer reviews your note, makes an offer, and wires the money from its own account at closing. A note broker does not buy anything. The broker collects your note documents, shops them to one or more buyers, and gets paid out of the spread or a fee. You may never talk to the real buyer.
Both can get your note sold. The difference shows up in three places: the price, the timeline, and whether the first number you hear is the number you get at closing.
| Direct note buyer | Note broker | |
|---|---|---|
| Whose money | Its own | The end buyer's |
| How they get paid | From the note payments after closing | A spread or fee out of your price |
| Who makes the offer | The person who will fund it | Someone guessing what a buyer will pay |
| Who you talk to | The buyer | The broker, then maybe the buyer |
| Chance of a lower number later | Lower, if the documents match what you said | Higher, because the end buyer does its own review |
Selling a land note?
We buy land notes with our own money for 80 to 90% of balance. Written offer in 24 hours, close in about 7 days.
Get a Free QuoteWhat Is My Note Worth?How does a note broker get paid?
Out of your price, one way or another.
Most brokers get paid in one of two ways. Some take a fee from the seller or the buyer. Others quote you one number and sell the note to a buyer for more, keeping the difference. Neither is wrong. But either way, the money comes out of what the note is worth.
Ask any broker how they get paid. A good one will tell you straight. If the answer is vague, assume the spread is bigger than you would like.
Why does the offer change when a broker is involved?
Because the first offer is a guess. The real buyer has not seen your file yet.
A broker's quote is usually based on what they think a buyer will pay. Then the buyer reviews the payment history, the title, the property value, and the documents. If anything looks different from the first story, the buyer lowers the price, and the broker passes the lower number back to you.
That is called a retrade, and it is the most common complaint I hear from sellers who tried a broker first. A direct buyer can retrade too if the file turns out different from what you told them. The difference is that a direct buyer's first offer comes from the same person who will do the review, so there are fewer surprises.
Rule of thumb: the number that matters is the one in writing from the person who will wire the money.
How can I tell if I am talking to a direct land note buyer?
Ask who wires the money and whose name goes on the assignment.
A direct buyer can answer that in one sentence: "We do, from our own account, and the assignment is to our company." A broker will talk about a network, partners, or funding sources. Ask for a written offer with the price, the conditions, and the closing timeline. Real buyers put it in writing.
Questions to ask before you send your documents:
- Whose money pays for the note at closing?
- Who is the assignee on the assignment of the deed of trust or mortgage?
- Will you put the offer in writing, with the conditions listed?
- What could make the price go down after due diligence?
- How many days from signed offer to closing?
- Who services the note after you buy it?
When does using a note broker make sense?
When your note is unusual and you want someone to shop it widely.
A broker can help with notes that most buyers pass on: odd property types, very large pools, or states where few buyers work. A good broker knows which buyers like which paper. If a direct buyer's box does not fit your note, a broker may find the one buyer who wants it.
For a normal seller financed land note, performing or not, with a promissory note and a recorded deed of trust or mortgage, I would go direct first. You can always shop it after you have a firm written offer in hand.
How does Damen Capital buy land notes?
Directly, with our own money, for 80 to 90% of the balance.
We review the note, the payment history, and the property, then send a written offer within 24 hours. Closings take about 7 days. We buy performing and non performing notes with no seasoning. The property must be worth at least $50,000, the balance at least $25,000, and our price no more than 65% of the value.
We buy promissory notes secured by a recorded deed of trust or mortgage. We do not buy land contracts. On parcels under 10 acres we need a perc test showing a conventional septic system will work. We do not buy notes in California, Hawaii, Louisiana, Maryland, New Jersey, New York, or Pennsylvania. The full list is on our note buying criteria page, and you can run your numbers in the note value calculator.
Want an offer from the buyer, not a middleman?
Get a Free Quote →Frequently Asked Questions
What is a direct land note buyer?
A company that buys seller financed land notes with its own money, makes the offer itself, and wires the funds at closing. Damen Capital is a direct land note buyer.
What does a note broker do?
A note broker collects your note documents and shops them to buyers. The broker gets paid a fee or keeps the spread between its quote and the buyer's price.
Do note brokers get sellers a better price?
Sometimes on unusual notes. On a normal land note, the broker's cut comes out of the price, so a direct buyer usually nets you more.
Why did my note offer go down?
Usually because the real buyer reviewed the file and found something different: payment history, title, property value, or missing documents. That is called a retrade.
How fast can I sell a land note to a direct buyer?
Damen Capital sends a written offer within 24 hours and closes in about 7 days from a signed offer and a complete file.