keep CD or sell? (by Joe [MN]) Jan 1, 2015 8:04 PM|
keep CD or sell? (by Rr [WA]) Jan 1, 2015 9:56 PM
keep CD or sell? (by joe [MN]) Jan 1, 2015 10:13 PM
keep CD or sell? (by Jim in O C [CA]) Jan 1, 2015 10:48 PM
keep CD or sell? (by LiveTheDream [AZ]) Jan 1, 2015 10:48 PM
keep CD or sell? (by Rr [WA]) Jan 1, 2015 10:54 PM
keep CD or sell? (by S i d [MO]) Jan 2, 2015 4:36 AM
keep CD or sell? (by Ken [NY]) Jan 2, 2015 6:04 AM
keep CD or sell? (by James [MO]) Jan 2, 2015 9:05 AM
keep CD or sell? (by Dan [MA]) Jan 3, 2015 6:21 AM
keep CD or sell? (by Joe [MN]) Posted on: Jan 1, 2015 8:04 PM
State Specific Question About: MINNESOTA (MN)
I sold a house on CD April, 2010 at 8.865% interest, 10 yr
loan amount $61,935.
Current balance $39,384
Interest paid to date. $21,820.
Buyers ask if they can pay off loan now. If I allow them to pay off. I lose $10k Interest.
The contract for deed states the loan can not be paid off early.
Is it ok, to ask for half of the remaining interest? Or maybe a $2k fee to allow pay off early?
keep CD or sell? (by Rr [WA]) Posted on: Jan 1, 2015 9:56 PM
What do you want to do?
What is the current value of said property?
Are they taking good care of it?
Is area improving or getting worse?
Is your goal to actually sell the property? Or to eventually take it back due to failed CD?
keep CD or sell? (by joe [MN]) Posted on: Jan 1, 2015 10:13 PM
I want to sell. Yes they take good care if it. They put an addition on the house.
I am asking about the $10k in interest I would lose by selling early? And if I should ask for part of that to agree to them paying it off. Get a fee for it? --107.77.xx.xx
keep CD or sell? (by Jim in O C [CA]) Posted on: Jan 1, 2015 10:48 PM
With Dodd-Frank can you legally have a loan that can't be paid off early? --66.159.xxx.xxx
keep CD or sell? (by LiveTheDream [AZ]) Posted on: Jan 1, 2015 10:48 PM
I'd try in the $2,000 range. Seems reasonable. There may be laws dealing with early payoffs. I'd get done with it.
Many years ago I flipped condos with my grandmother, a realtor. She'd carry the paper for a year then discount it and sell to an investor, she had a number of these deals going on at once. --24.121.xxx.xxx
keep CD or sell? (by Rr [WA]) Posted on: Jan 1, 2015 10:54 PM
You don't really lose the interest. There is no guarantee they will pay it. Also, you get the money to reinvest and possibly make more money. So it is not a total loss.
I would ask for an early payoff fee. $2k should be feasible.
Sometimes, buyers want to discount the price for early payoff... So it sounds like you are actually doing well if they pay out the full amount due plus a fee.
I asked about the value of the property. This matters because they may be getting a loan to pay you off. If the value is really high, then you could demand a higher fee to pay off early. --67.160.xx.xxx
keep CD or sell? (by S i d [MO]) Posted on: Jan 2, 2015 4:36 AM
Most "loan" docs I've seen have a clause addressing early payoff...if it's allowed, how much the penalty is--if any, etc. I take it yours does not have this.
My suggestion is sit down for a coffee or beer with your buyer and hash out a deal that works well for you both. Any time the buyer is asking for changes for their benefit, I think you are due some compensation. A small fee would be in order. $2000 seems a bit high to me, but not outrageous. I'd probably take $1000 if they've been easy to work with and faithful in the past. Something similar to an ETF that we use on leases.
Disclosure: I've never done a CD. I have researched them, and I the details I've found don't seem favorable from either a buyer or seller perspective as compared to other approaches. --108.250.xxx.xxx
keep CD or sell? (by Ken [NY]) Posted on: Jan 2, 2015 6:04 AM
I would accept early payoff at face value and be happy to get it,when you wrote it you probably could have gotten rid of them if they did not pay with an eviction now more likely it will be a foreclosure.Also the majority of the interest has been paid,the further you go with this the more principle that is being paid,which benefits the buyer not the seller. --24.92.xx.xx
keep CD or sell? (by James [MO]) Posted on: Jan 2, 2015 9:05 AM
I highly doubt if a clause that states they can't pay off early is legal. But check with your lawyer. What others are advising you to do is to get a "fee". This might be called a "pre-payment penalty". These may not be legal anymore, but if they are still legal, chances are high that their terms are set forth in the note or security instrument. Charging these fees and/or preventing payoff fall in the general term of predatory lending. The penalty for predatory lending could be a big one. Check with a lawyer before you try to charge anything. Personally, if I had sold the house on a CD, I would accept an early payoff. You'll have your money to go do something else with to earn what you right now are thinking you are losing. --75.81.xxx.xx
keep CD or sell? (by Dan [MA]) Posted on: Jan 3, 2015 6:21 AM
I'd take the cash and buy another piece of real estate and you'll earn much more than 8%. --50.169.xx.xx