If the buyer of the house is not paying the Seller Carryback Note as agreed (non-performing note), you have several options to get rid of it, including:
- Foreclosure: You can initiate foreclosure proceedings to take possession of the property and sell it to recover the balance owed on the note. This is a legal process that can be time-consuming and costly, but it may be the best option if the borrower is not making any effort to pay the note.
- Workout: You can work out a new payment plan or modify the terms of the note with the borrower to help bring the note back into good standing. This may involve forgiving a portion of the debt or extending the payment term to make the payments more manageable for the borrower.
- Sale: You can sell the note to a third party, who will then take over the responsibility of collecting payments from the borrower. Depending on the circumstances, you may need to discount the note to attract a buyer, especially if the borrower is not paying. If that is your case, we will be glad to tell you what the market is paying for your note.
- Legal action: You can take legal action against the borrower to recover the balance owed on the note. This may involve hiring an attorney to pursue collections or filing a lawsuit against the borrower for breach of contract.
It is important to carefully consider your options and to seek legal and financial advice before taking any action to get rid of a non-performing Seller Carryback Note. Each option carries different risks and costs, and it is important to understand the potential consequences before making a decision.
Buying non-performing notes, however, can be an excellent strategy to buy the real estate itself as the collateral of the loan, once this kind of note can be bought, not rarely, for pennies on the dollar.