Your buyer was paying every month. Then one payment was late, then two, and now they will not answer the phone. You did not sell land on terms to become a collections department. What now?
You have three choices: work it out, foreclose, or sell the note. I have done all three many times. Here is how to pick.
What is a non performing land note?
A land note where the buyer has stopped making payments, usually 90 days or more.
A non performing note is still a debt secured by the land. The buyer owes the balance, and your deed of trust or mortgage still gives you the right to foreclose if they do not cure. That right, plus the land behind it, is what gives a non performing note its value to a buyer like us.
What are my options when my land buyer stops paying?
Work it out, foreclose, or sell the note.
| Option | Best when | Trade off |
|---|---|---|
| Work it out | The buyer wants to keep the land and can catch up | Low cost, but it may happen again |
| Foreclose | You want the land back to resell | Legal costs and months, longer in judicial states |
| Sell the note | You want cash now and no more headaches | You take less than the balance, but you are done |
Before any of them, call the buyer. Sometimes it is a short job loss and a plan fixes it. What to do step by step is in what happens when a land buyer stops paying.
Buyer stopped paying?
We buy performing and non performing land notes. Send the note and payment history for a bid.
Get a Free QuoteSell Your NoteHow long does foreclosure take on land?
It depends on your state, from a few months to more than a year.
States that foreclose outside of court under a deed of trust usually move faster. States that require a court case take longer and cost more. Either way, you pay the legal costs up front and wait. Check your state on our foreclosure timelines by state page.
Can I sell a land note if the buyer is not paying?
Yes. We buy non performing land notes as well as performing ones.
We price a non performing note on the value of the land, the balance, how far behind the buyer is, and how long foreclosure takes in your state. Expect less than a performing note would bring. In exchange, you get cash now, and the default, the buyer, and the foreclosure become our problem.
We buy promissory notes secured by a deed of trust or mortgage with a balance of $25,000 or more, on land with legal access and no major wetlands or flood zone, and not in CA, HI, LA, MD, NJ, NY, or PA.
Who buys non performing land notes?
Note buyers who price the land and the foreclosure, not the payment history. We are one of them.
Many note buyers only want performing notes with a clean payment history. A buyer of non performing notes is really buying the right to foreclose and the land behind it, so it has to know land values and the foreclosure process in your state. When you shop a non performing note, ask each buyer three things: do you buy non performing notes, do you buy in my state, and do you buy the note directly or pass it to someone else. See land note buyer vs. note broker.
What we pay: non performing land notes typically price at 50% to 65% of the balance, depending on the property and how far behind the buyer is. A performing note brings 80% to 90%. We buy in every state except CA, HI, LA, MD, NJ, NY, and PA. Details are on our note buying criteria.
What do I need to send to sell a non performing note?
The note, the recorded deed of trust or mortgage, and the payment history.
- The signed promissory note
- The recorded deed of trust or mortgage
- The payment history, from your servicer if you use one
- Any late notices or letters you sent the buyer
- Where things stand, including any foreclosure filing
Send it through submit your note and we reply with a bid within 24 hours.
How do I avoid this next time?
More down, a credit check, and a licensed servicer.
Buyers with more of their own money in the land walk away less often. Screen with our land buyer credit matrix and use a professional servicer so late notices go out on time. Or sell the note at closing and never collect a payment. Rule of thumb: the down payment is your best default protection.
Frequently Asked Questions
What is a non performing land note?
A land note where the buyer has stopped paying, usually for 90 days or more. It is still secured by the land.
Can I sell a land note if my buyer stopped paying?
Yes. Damen Capital buys non performing land notes. The price depends on the land value, the balance, how far behind the buyer is, and your state's foreclosure timeline.
Should I foreclose or sell my non performing note?
Foreclose if you want the land back to resell and can wait and pay legal costs. Sell the note if you want cash now and no more work.
Do you buy land contracts in default?
No. We buy promissory notes secured by a deed of trust or mortgage only.
Who buys non performing land notes?
Note buyers who value the land and the foreclosure process, not the payment history. Damen Capital buys non performing land notes directly in every state except CA, HI, LA, MD, NJ, NY, and PA.
How much is a non performing land note worth?
Damen Capital typically pays 50% to 65% of the balance for a non performing land note, depending on the property and how far behind the buyer is. Performing notes bring 80% to 90%.
Related Reading
- What happens when a land buyer stops paying →
- Foreclosure timelines by state →
- How to sell a land note →
- What is my land note worth? →
- Note buying criteria →
- Submit your note →
- Sell a promissory note or mortgage note →
- What if my land buyer dies? →
- What if my land buyer gets divorced? →
- What if my land buyer files bankruptcy? →
- What if my land buyer stops paying property taxes? →