Welcome To The Note Finders Resource Kit
by Russ Dalbey
Enclosed you
will find 8 valuable resources that you may print and use over and over. Please
note that America's Note Network nor it's employees are giving legal advice or
recommending you use these documents. These sample documents are provided to
you for educational purposes only. Please have all forms reviewed by your
attorney before using.
- Telephone Script
- Note Analysis Worksheet
- Information Request Form
- Non-Circumvent Agreement
- Payout Agreement
- Commitment letter
- Cover Letter to the Commitment
Letter
- Note Holder Finder Fee
Agreement
- Tender Agreement for Assignment
of Note Purchase Contract
The Telephone Script
The
telephone Script is designed to give you an idea of what to say to your
prospective note seller. Remember, you want to be comfortable with what you are
saying and not come across as reading.
Create a
separate page for each person that you call with this information:
Their Name
_____________________________ Date_________
Address
________________________________ Your Name________________
Phone #
________________________________
Sample Script For
Calling
__(Their
First Name)__, this is __________________(speak with excitement).
I'm calling because I have an interest in the property you sold in __(State)__.
Do you remember? The buyers weren't able to pay you off in full so you had to
carry back a promissory note, right?
I would like
to cash you out of what you're owed.
Did you know
that you have a right to sell your contract and get cash now? YES NO
Would you be
interested in finding out today's value of your note? YES go on / NO stop.
Paper
Analysis Worksheet Questions
1. What is the
property address?
__________________________________________________________
2. What kind
of property is it?
__________________________________________________________
3. How much
did you sell it for?
__________________________________________________________
4. Do the
buyers live there?
__________________________________________________________
5. What are
the loans on the property?
a. 1st Loan
$___________ Mo PMT $___________ NEW or ASSM
Lender?
__________________________________________________________
b. 2nd Loan
$___________ Mo PMT $___________ NEW or ASSM
Lender?
__________________________________________________________
d. What was
the Down PMT $___________________________
6. What is the
original amount of your note? $________________________
7. What is the
interest rate on your note? ___________________________
8. What is the
monthly payment amount you receive?____________________
9. What is the
original length of time on the note?___________________
10. When did
you receive your first payment? (Mo & YR)________________
11. What day
of the month is your payment due?________________________
12. How many
payments have you received?______________________________
13. Have all
of your payments been received on time? YES / NO
(if no) number
of months late?_____________________
14. What does
the payor do for a living?______________________________
15. If we were
to agree upon a price, how soon would you need the cash?_______
Ok, let me
analyze your information and I'll call you back in a few minutes with an exact
price.
(At this point,
transfer the information from the script to the
Paper Analysis Worksheet)
When you call
them back, you will say;
Hi, __(Their
Name)__ this is _____________. I have a purchase price for your note. Do
you have a piece of paper and a pencil handy? You never know when I might say something
important.
Have you ever
sold a note before? Let me just briefly explain to you how this process works
and how we determine the cash value of your note.
We analyze
each monthly payment you receive and calculate its value into the future. In
other words, dollars today will buy more than dollars in the future. If it's ok
with you, I would like to give you a couple of examples about what I'm talking
about.
Looking back
25 to 30 years ago, we could go to the movies for what? about $.50, right! And gasoline
was about $.65 a gallon? Now look at what we pay. This is what I mean when I
say dollars today are worth more than dollars in the future. So we have to
factor that into the price.
I have another
example: Suppose I have $10 in my left hand and $5 in my right. Which one do
you want? Of course the $10 in my left hand. But now, let's add this to the
equation: you have to wait (the remaining number of monthly payments on their
note, lets say 96) 8 years to get the $10 or you can have the $5 now. Which one
would you rather have? Of course the $5 now, right?
So, let me
give you some numbers, now that you understand how we determine the cash value
of your note.
There are two
ways you can sell a note. The first way is through a partial sale of your note
which is the most profitable way for you. You can sell a portion of the
remaining payments on it. For example, you sell me the next 60 of your 96
remaining monthly payments you are owed. At the end of the 60 months, the note
payments revert back to you, and you would receive the remaining 36 payments.
At that time, the balance will still be $_________.
So, you are
getting a lump sum of cash now and you still have $________ coming to you in 5
years. With this option you are still in the deal. If the Payor doesn't pay,
I'm going to come back to you and say, "Bob, I gave you all that money, so
you need to keep me whole by keeping those payments current. They sound as if
they are good Payors from what you described, so I'm sure there shouldn't be
any problem.
The Second
option is to cash you out in full. So, if the Payors don't pay or the property
burns down or blows away, you don't care because you are out of the deal. I
will give you $__________ for the full sale of your note.
Which one of
these options sounds the best to you? (Be quiet and listen in order to solve
their problem).
If they say,
"I need to think about it". You can say, ok, I can understand that.
Bob let me just explain one other thing to you. I want you to understand how
the papers are actually transferred and how you are guaranteed to get paid.
When you
decide to go ahead with this sale, I will send you out a Commitment Letter
which states my obligation to you, along with a list of copied documents I will
need back from you.
Then I'll
deposit a check in the amount of $__________ (purchase price) into an escrow
account at a title or escrow company of your choice. They'll close the
transaction and make sure you get the right amount of money and that I get the
right paper work. That way you are 100% guaranteed to get paid. Sounds pretty
good, doesn't it?
Would you like
me to send you this information package today? If yes: Ok, you should receive
it in the next ________day(s). Would it be ok if I called you back on that day
to go over it with you and answer any questions you may have. (Set an
appointment or don't send it out).
If No: Ok,
when should I call you back? Incidentally, I haven't said anything to offend
you have I? (Be quiet! They'll tell you their problem and what you need to do
to solve it).
Note Analysis Worksheet
The paper
worksheet always needs to be completed before anyone can make a determination
of what the note is worth. Please make sure that you gather all of the
information on this worksheet.
America's Note Network
Paper Work Sheet
Name :
__________________________________________
Date:
____________
Address:
__________________________________________
Phone #:
__________________________________________
Property Information
Property
Address:
__________________________________________________________________
Type Of
Property: _________________________________
Owner
Occupied: _______
Property
Value: $_________ Established By: ________
Date:
_________________
Payor's Credit
Score: ____________
1st loan
Amount: $_____________ Monthly Pmt: $____________ New / Assumed
2nd loan
Amount: $_____________ Monthly Pmt: $____________ New / Assumed
Down Pmt
Amount: $_____________ LTV: _______% ITV: _______%
Note Information
Original
Amount $____________ Balance $_____________
As
of:_______________
Interest Rate
: ____________%
Payment Amount
: $___________
Date of 1st
Payment :_______________________
Original
Length: ___________ mos.
Type: Amort,
I/O, Other_______________
Number of
Payments Made:_____________
Number
Remaining:____________________
Are the payments
on time:_________ What day of the month are they due_______
Balloon
Payment if any: $__________________
Are there any
Clauses:
_____________________________________________________
Seller Information
Note Seller's
Motivation: _________________________________________________
When Needs To
Close: ______________
Received other
Offers: $______________
What does the
Payor do for a living:
_________________________________________
Is there
anything else I should know:
________________________________________
Information Request Form
The
Information Request Form indicates the documents and information that you will
want the note seller to send to you. You may want to send this form to the
seller.
Information For Your
Contract Sale
The sale of
your real estate contract can only be processed when you follow these
requirements. The information you provide on the front and back of this sheet
is necessary to process your contract sale.
We will need a
copy of the documents listed below:
- Copy of Note
- Copy of Trust Deed, Mortgage or Land Contract
- Escrow instructions from real estate sale in
which the "Contract" was created
- Escrow closing statement from real estate sale in
which the "Contract" was created
- Title insurance policy which insures the
"Contract"
- Fire insurance information on the property which
secures the "Contract" (Insurance Company, Policy Number,
Agent's Name and Address)
- Loan Payment Record
- Please provide two (2) pictures of subject
property
- Copy of street or city map showing property
location
- Plans, surveys or other documents in your
possession
Your signature
is required for us to confirm balances, payment history and to obtain copies
from your title or escrow company in the event we need further information.
Thank you.
Your Signature
Title / Escrow Company Number
Non-Circumvent Agreement
The Non-Circumvent
Agreement is designed to protect your interest when you broker a note to an
investor. You have a commission due to you for referring the note to an end
buyer and this document will protect you. This document is valid for five years
-- this means that it is useful for any number of dealings with the particular
note buyer that you are working with. For this reason, you need not specify a
property address or amount, as it is merely an agreement with the note buyer
that s/he will not go around you and deal directly with the note seller.
This way, once signed, you can feel comfortable disclosing confidential
information to the prospective note buyer.
Please have
your attorney review this sample agreement.
Non-Circumvention,
Non-Disclosure And Confidentiality Agreement
THIS AGREEMENT
entered into on this _______ day of _____________, 200___ is for the
Professional Association and arrangement of Non-Circumvention, Non-Disclosure
and Confidentiality between ________________________________ whose office is at
____________________________________________ and
________________________________ whose principal place of business is at
____________________________________________ hereinafter, called the "The
Parties."
The Parties
with this agree to respect the integrity and tangible value of this agreement
between them.
THIS AGREEMENT
is a perpetuating guarantee for five (5) years from the date of execution and
is to be applied to any and all transactions present and future, of the
introducing party, including subsequent follow-up, repeat, extended,
renegotiated, and new transactions regardless of the success of the project.
Because of
THIS AGREEMENT, the Parties involved in this transaction may learn from one
another, or from principals, the names and telephone numbers of investors,
borrowers, lenders, agents, brokers, banks, lending corporations, individuals
and/or trusts, or buyers and sellers hereinafter called contacts. The Parties
with this acknowledge, accept and agree that the identities of the contacts
will be recognized by the other Party as exclusive and valuable contacts of the
introducing Party and will remain so for the duration of this agreement.
The Parties
agree to keep confidential the names of any contacts introduced or revealed to
the other party, and that their firm, company, associates, corporations, joint
ventures, partnerships, divisions, subsidiaries, employees, agents, heirs,
assigns, designees, or consultants will not contact, deal with, negotiate or
participate in any transactions with any of the contacts without first entering
a written agreement with the Party who provided such contact unless that Party
gives prior written permission.
Such
confidentiality will include any names, addresses, telephone, telex, facsimile
numbers, and/or other pertinent information disclosed or revealed to either
Party.
The Parties
agree not to disclose, reveal or make use of any information during discussion
or observation regarding methods, concepts, ideas, product/services, or
proposed new products or services, nor to do business with any of the revealed
contacts without the written consent of the introducing party or parties.
The Parties
agree that due to the many variables surrounding each Business Financial
Transaction that will occur because of this agreement, the commission to be
paid and/or the fee structure between the Parties can vary. A separate
fee/commission agreement will outline compensation for each Business/Financial
Transaction. The fee or commission agreement must be drafted and acknowledged
by signature before all Business/Financial Transactions.
In case of
circumvention, the Parties agree and guarantee that they will pay a legal
monetary penalty that is equal to the commission or fee the circumvented Party
should have realized in such transactions, by the person(s) engaged on the
circumvention for each occurrence. If either party commences legal proceedings
to interpret or enforce the terms of THIS AGREEMENT, the prevailing Party will
be entitled to recover court costs and reasonable attorney fees.
The parties
will construe THIS AGREEMENT in accordance with the laws of the State of
_________________, County of _________________. If any provision of this
agreement is found to be void by any court of competent jurisdiction, the
remaining provisions will remain in force and effect.
THIS AGREEMENT
contains the entire understanding between the Parties and any waiver, amendment
or modification to THIS AGREEMENT will be subject to the above conditions and
must be attached hereto.
Upon execution
of THIS AGREEMENT by signature below, the Parties agree that any individual,
firm company, associates, corporations, joint ventures, partnerships,
divisions, subsidiaries, employees, agents, heirs, assigns, designees or
consultants of which the signee is an agent, officer, heir, successor, assign
or designee is bound by the terms of THIS AGREEMENT.
A facsimile
copy of this Non-Circumvention, Non-Disclosure and Confidentiality Agreement
shall constitute a legal and binding instrument. By setting forth my hand below
I warrant that I have complete authority to enter into THIS AGREEMENT.
For:
____________________________
____________________________
(Signatures)
Payout Agreement
The Payout
Agreement is more specific to a particular deal than the Non-Circumvent
Agreement. This one will actually state the amount that the Note Buyer agrees
to pay for the note in question. It also will be used in escrow to determine
how much will go to you, as a broker.
____(Note
Buyer)____ agrees to pay ____(Your Name)___ upon closing
the deal with _____(Note Seller)____ for the Property Address:
_________(Address, City, State)____________.
This agreement
will be included in the escrow instructions for this transaction. Payment shall
be made to:
Your Name
Your Address
City, State & Zip Code
Signed:
____(Note Buyer's Signature)_____
_______(Your Signature)__________
Commitment
Letter
The Commitment Letter is a letter that you will send the
seller of the note as soon you have agreed upon a price. This letter will tie
up the note and take it off the market. If the seller cancels the agreement,
then you will receive a minimum of $125 for your efforts. If, for any reason,
you or your end buyer wish to cancel the agreement you may do so without
penalty.
Commitment Letter
THIS COMMITMENT TO PURCHASE, is made ___(Today's Date)___
by and between ____(Their Name)___, the undersigned (Seller), and ___(Your
Name)___, (Purchaser), and/or its successors and assigns, whose address is _______(Your
Address)_____
This commitment is made in ____(Your County)____, subject
to and contingent upon ____(Your Name)____, and/or its investor's
inspection and approval of the property and all documents including, but not
limited to, credit, appraisal and title work.
Seller agrees to sell and convey to Purchaser, and Purchaser
agrees to buy, upon the terms and conditions set herein, that certain _____(the
instrument, such as Trust Deed)____ wherein the Payor owes a current
principal balance of $__(Balance)__ as of this month, carrying interest
on the principal balance at the rate of __interest__% per annum, and
requiring a monthly principal and interest payment of $__(Payment Amount)__.
The agreed purchase price is the sum of $__(Purchase Price)__
provided there are no underlying problems. If the contract has to be
renegotiated a verbal commitment from the seller will be binding.
The subject property is located in ________________ County and
is legally described as follows;
Property Address
______________________________________________
ADDITIONAL LEGAL
DESCRIPTION TO BE PROVIDED
AND VERIFIED BEFORE CLOSING
Seller warrants that:
1.
There are no prior liens or encumbrances on the property subject
to the Instrument except as stated below:
SUBJECT TO: NO OTHER LIENS OR ENCUMBRANCES
2.
It has full power, authority and legal right to execute,
deliver, and perform, its obligation under this letter;
3.
This Letter and the Instrument are legally valid and binding,
and enforceable in accordance with their terms, and there are no claims or
defenses, personal or otherwise, or offsets whatsoever to the enforceability or
validity of the Instrument;
4.
There are no lawsuits or legal proceedings pending, or to the
best of Seller's knowledge, threaten regarding encumbrances on, or the
ownership, use or possession of, the property or the Instrument;
5.
No brokerage or other commission is due and unpaid in connection
with the Instrument; and,
6.
Seller has, as of the date of this Letter, and will have as of
the date of the closing, good, marketable title to the Instrument.
During our processing period any additional payments made to
Seller on the Instrument which cause a reduction in the principal balance below
$100 will also cause a minor adjustment in the purchase price at closing.
Seller agrees to return any payments received after the closing of this
Instrument.
Seller understands that __(Your Name)__ , is not acting
as an advisor for Seller in connection with this transaction, nor as Seller's
agent, but rather is dealing with Seller at arms length, at all times. Seller
acknowledges that it has sought and received whatever independent legal, tax,
accounting or other advice it desires concerning this transaction. Further,
Seller is not relying on __(Your Name)__, in entering into this
transaction, but is acting on its own best judgment.
Seller agrees to execute all necessary documents to effect the
assignment and conveyance to Purchaser of its interest in the Instrument.
Seller agrees to furnish any and all documents in its possession necessary to
consummate this transaction. If, after closing, it is discovered that errors,
omissions, or loss of documents has occurred, Seller agrees to cooperate with
the Purchaser to correct any and all errors, omissions, or losses with in ten
(10) days of receipt of notice from Purchaser.
Upon our receipt of all the necessary closing documents related
to this transaction, we should be able to close within thirty to forty five
days.
All normal closing costs will be the responsibility of the
Purchaser with the exception of any additional, or unexpected, legal cost
necessary to clear or perfect title. Otherwise, Seller will only be responsible
for the processing fee of $125.00.
Should the Seller fail to close, after signing this agreement,
Seller shall be obligated to reimburse Purchaser for all out-of-pocket expenses
incurred related to this transaction, up to the time of cancellation. These
expenses should normally be limited to title and/or appraisal fees, plus the
processing fee of $125.00
Purchaser hereby gives Seller a specific period of ten days to
complete, and return, this Commitment Letter, and agrees to keep this offer
open for that period of time. If Seller is unable to complete, and return this
agreement within the allotted time, this agreement shall be canceled. Purchaser
may extend the time period, upon conditions it deems acceptable.
Your Signature
By __________________________
ACCEPTED:
____________________________ ___________________________
Seller's Signature
Social Security Number
SSN:________________________ SSN:_______________________
DATE ________________________
Cover
To The Commitment Letter
Date
Note Seller's First & Last Name
Note Seller's Street Address
City, State & Zip Code
Dear Note Seller's First Name:
Thank you for the opportunity to be of service to you. We will
do everything possible to expedite your closing once you return the enclosed
"Information Sheet" and copies of the requested documents.
The cash you will receive is $__(Purchase Amount)__ for
the full sale of your interest, or for the next _____ number of payments.
A typical transaction takes 30 to 45 days to process provided
there are no unusual circumstances which arise. The normal closing process
includes a credit evaluation on the buyer, a drive-by appraisal and a title
insurance review. We pay for the normal closing costs.
Occasionally, purchases have to be renegotiated or canceled if
the review process reveals underlying problems that cannot be corrected.
Thankfully, this situation doesn't happen very often! If it does, you retain
the right to cancel the transaction without any obligation on your part.
Also find enclosed a formal "Commitment Letter" which
begins the closing process and states our obligation to you. Please sign it and
return it with the above requested documents. We have a toll-free number
(1-800-XXX-XXXX) if you have questions or want more information.
Warmly,
____(Your Name)____
V.P. Operations
NOTE HOLDER FINDER FEE AGREEMENT
This Referral Agreement
dated as of _________________________, ______ is entered into by
and between
_______________________________________________________, (hereinafter
"Investor")
and ________________________________________, (hereinafter "Finder")
for the purpose of setting forth the terms and conditions upon which Finder
will refer to Investor certain individuals holding promissory notes or other
evidence of debt or obligation secured by mortgages, deeds of trust, real
estate contracts, installment contracts, chattel mortgages, or other (“Security
Instruments”). In consideration of the terms and conditions of this Agreement
and other valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the parties mutually agree as follows:
1. Finder will from
time to time refer or otherwise make known to Investor the names and other
pertinent information of individuals that are holding promissory notes and
Security Instruments securing real estate (the “Note Holder”).
2. Investor herein
acknowledges that with regard to the cash flow instrument(s) hereinabove
described, Finder is deemed to have been the Introducing Party and this
Agreement is solely for said introductory or referral services. Though Finder
has developed certain proprietary information regarding such Security
Instruments and agrees herein to provide Investor with said information, Finder
shall not be deemed to have made any credit evaluation or any other evaluation,
decision, or representation regarding the quality, reasonability, or security
of the notes referred to Investor. Finder is not required to do any further
work in order to receive the compensation provided in Section 3. herein below.
3. Should Investor
purchase the promissory note or notes of any note holder referred to Investor
by Finder, Finder shall be deemed procuring cause and on the date of such
purchase, Investor shall pay to Finder as a referral fee, an amount equal to
_____________ percent (___%) of the outstanding principal amount of the
promissory note(s) and/or Security Instruments purchased by Investor. Investor
further agrees that Finder shall be entitled to this fee for any note and/or
Security Instrument purchased by Investor from any note holder referred by
Finder for a period of _________________ (___) years from the date of the first
introduction, unless a different fee for any given note purchase is agreed to
in writing in advance by the Parties hereto.
4. Investor further
agrees that for the _________________ (___) year period from the date of the
first introduction, Investor will not attempt to circumvent this Agreement by
further referral of the note holder to another investor. In the event that
Investor is not the actual purchaser of any note from a note holder initially
referred to Investor by Finder, Finder shall still be entitled to the fee
provided in Section 3.
5. The Parties herein
acknowledge and agree that Finder is an independent contractor and is not an
agent, employee, or representative of Investor, and further that Finder is not,
and does not represent himself to be a loan broker, securities dealer, real estate
broker, or any other form of financial dealer, adviser, or representative of
Investor or any other parties to the purchase transaction of any Security
Instruments purchased hereunder, and Investor herein agrees to indemnify and
hold harmless Finder for any liability arising from such claims as a result of
this transaction.
6. A facsimile or
electronically signed copy of this Agreement shall constitute a legal and
binding instrument between the parties and upon the parties and their
respective assigns, estates, Successors, and heirs. It may be changed or
amended by a writing signed by both parties. It may be assigned only with the
written consent of the other party. This Agreement represents the entire
agreement between the parties.
7. This Agreement shall
be construed in accordance with and governed by the laws of the State of
_____________________. If any portion of this Agreement is deemed unenforceable
for any reason, the remaining portions shall remain in full force and effect.
8. This Agreement is made
for an indefinite term, subject to termination on _______________ (____) day
written notice by either party sent to the other party. Any termination of this
Agreement shall not terminate the obligation of Investor to remit to Finder any
referral fees for a period of ________________ (___) years as set forth in
Section 1, 2 and three.
In Witness Whereof, the
parties have executed this Agreement as of the date herein below, to be
effective from the date first above here written.
__________________________________________
______________________________
Finder Date
__________________________________________
_____________________________
Investor Date
© 1995-2005 Russ
Dalbey. All Rights Reserved.
TENDER AGREEMENT FOR ASSIGNMENT
OF NOTE PURCHASE CONTRACT
This Agreement by and
between _____________________________________________________,
(hereinafter
"Investor") and ______________________________________________,
(hereinafter "Finder") dated by the Parties herein below, is entered
into for the purpose of setting forth the terms and conditions upon which Finder
will tender to Investor a certain contract for the purchase of a promissory
note and/or Security Instrument evidencing debt or other monetary obligation of
the Maker (the “Contract”) in consideration of the terms and conditions of this
Agreement and other valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the Parties herein agree as follows:
1. Finder is the is the
owner of a Purchase and Sale Agreement dated ________________, _______
between Finder as
buyer, and ________________________________________________________ as seller,
(the "Contract") wherein Finder has contracted for the purchase of a
promissory note and/or Security Instrument evidencing a monetary obligation
with a remaining balance of
____________________________________
($_______________) Dollars secured by a mortgage >
or other security
instrument securing property described as ________________________________
_______________________________________________
which Investor desires to purchase.
2. Finder will
concurrently herewith assign to Investor all of its rights, title and interest
in above described subject Contract. Finder shall not be deemed to have made
any credit evaluation or any other evaluation or decision regarding the
quality, reasonability, or security of the notes that are the subject of the
Contract. Investor agrees that the tendering of the Contract and underlying
note and security instrument is without recourse to Finder.
3. On the settlement
date of the Contract, or the execution of any derivative thereto, Investor
hereby agrees to pay to Finder a sum in the amount of
______________________________________________________
($_____________)
Dollars, which includes
any advance deposit or payment that Finder may have paid under the Contract.
Failure by Investor to pay such amount will be deemed an automatic breach of
this Agreement by Investor, for which Investor herein agrees will give rise to
damages to Finder, and Investor herein agrees to indemnify Finder for any and
all said damages.
4. Investor and Finder
agree that Finder is not, and does not represent to be a securities dealer,
loan broker, real estate broker, or any other form of financial dealer or
adviser, and further, that this a sales transaction between independent
Parties, and Investor acknowledges and agrees that there have been no other
oral or written representations or agreements made by the Finder except those
set forth herein. Investor herein agrees to indemnify and hold harmless Finder
for any liability arising from any claims related to this Paragraph and/or
resulting from this transaction.
5. This Tender
Agreement shall be binding upon the parties and their respective assigns,
estates, successors, and heirs. It may be changed or amended by a writing
signed by both parties. It may be assigned only with the written consent of the
other party. This Agreement represents the entire agreement between the parties
on this subject. This Agreement shall be construed in accordance with and
governed by the laws of the State of _____________________. If any portion of
this Agreement is deemed unenforceable for any reason, the remaining portions
shall remain in full force and effect.
In Witness Whereof, the
parties have executed this Agreement as of the date first above written.
_______________________________
__________________________________
Finder Date
_______________________________
__________________________________
Investor Date