By Kevin Clancy, President of American Funding Group
Why This Guide Matters for Texas Note Sellers
If you hold a private mortgage note, deed of trust, or real estate contract in Texas, you’ve probably thought about selling it at some point. Whether you’re ready to cash out completely, look at a Texas partial note sale, or simply explore your options, the process can be both exciting and a little intimidating. But make sure that you are avoiding the mistakes selling a mortgage note in Texas.
Here’s the thing: Texas is unique. Our real estate market is one of the largest and most active in the nation, but that also means there’s a lot of noise — from inexperienced note buyers to online “get cash fast” promises that don’t always deliver. Over the past 30+ years, I’ve seen note sellers in Texas make the same mistakes again and again.
The good news? They’re easy to avoid when you know what to look for. In this article, we’ll walk through the 4 most common mistakes Texas note holders make — and I’ll give you practical Texas note Buyer tips to make sure you walk away with the best deal possible.
And remember — if you want to go deeper or get a free, no-obligation quote, you can visit our Texas Note Buyers page for more details.
Mistake #1: Taking the First Offer Without Shopping Around
I get it — selling a note can feel like a “just get it done” situation, especially if you need cash quickly. But here’s the reality:
In Texas, there many note buyers, and not all offers are created equal. Some will give you a ballpark figure just to lock you in, only to reduce that offer later after “reviewing the paperwork.” Others will offer less than your note is truly worth because they’re assuming you won’t compare.
Real-life example: A note holder in Dallas recently came to us after accepting an offer that was $11,000 lower than what we would have paid — simply because she didn’t realize there was room to negotiate.
How to avoid it:
- Get at least two to three quotes from reputable buyers.
- Compare not just the dollar amount, but also the terms (fees, timing, and contingencies).
- Watch out for vague promises like “up to” pricing — you want a firm offer based on actual review of your documents.
- Makae sure you are dealing with a note buyer who cares more about you and your situation than they do about their business.
Mistake #2: Not Having Complete Documentation Ready
One thing that slows Texas note sales more than anything else? Missing paperwork.
In Texas, mortgage notes are typically secured by a Deed of Trust rather than a mortgage, and you’ll need certain documents to complete the sale. If they’re missing, buyers will either delay the process or lower their offer to cover potential risk.
What you’ll usually need:
- Original Promissory Note
- Copy of the Recorded Deed of Trust
- Payment history of the borrower
- Any modifications or extensions made to the note
- Proof of insurance and taxes being paid
Pro Tip: Even if you don’t have the original note in hand, don’t panic — a seasoned Texas note buyer can often help you retrieve or re-establish the documentation. But having it upfront will almost always speed up the process and improve your payout.
Mistake #3: Ignoring the Partial Sale Option
Many Texas note sellers think they have to sell the whole note to get cash. That’s simply not true.
With a Texas oartial note sale, you can sell a certain number of future payments to get the cash you need now — while keeping the remaining payments for yourself.
For example:
Let’s say you hold a $150,000 note on a rental property in Austin, paying $1,200 per month. You might sell just 60 payments for a lump sum today, and when those 60 months are up, the payments revert back to you.
Why Texans like this option:
- You get immediate liquidity without giving up all future income.
- It’s perfect for covering short-term expenses like home repairs, tuition, or paying off high-interest debt.
- You still maintain a connection to the property if that’s important to you.
This flexibility is one of the reasons American Funding Group works with so many note holders statewide — from Houston to El Paso — to structure deals that meet their exact needs. Mamy times, a partial Texas note sale is a great solution to a pending financial issue.
Mistake #4: Working with Inexperienced Buyers Who Don’t Understand Texas Law
Texas real estate law isn’t like other states — and that matters a lot when selling a note.
Here’s why:
- Texas is a non-judicial foreclosure state, which affects the risk assessment for buyers.
- The Deed of Trust process has specific requirements for recording and transferring notes.
- Property taxes and insurance rules differ from other parts of the country.
An inexperienced Texas note buyer may not understand these nuances, which can cause delays, legal issues, or undervaluation of your note.
Look for buyers who:
- Have a proven track record in Texas
- Can explain how Texas-specific laws impact your note sale
- Provide references from other Texas note sellers
Bringing It All Together
Selling a mortgage note in Texas doesn’t have to be complicated — but you do need to go in with your eyes open. The sellers who get the best outcomes are the ones who:
- Compare multiple offers
- Have their paperwork ready
- Consider all selling options (full vs. partial)
- Choose a buyer who knows Texas inside and out
If you’re ready to explore your options — whether you want to sell the whole note, part of it, or just find out what it’s worth — we’re here to help.
At American Funding Group, we’ve been buying Texas mortgage notes for over 30 years. We know the neighborhoods, the property types, and the laws — and we’re committed to making the process smooth, transparent, and profitable for you.
“We Promise to Treat You With Respect… The Way We Want to be Treated”
And that’s exactly what we’ve been doing since 1989. Over time, American Funding Group has become one of the most respected note buyers in the country… purchasing thousands of real estate notes, overcoming problems and buying notes which other note buyers couldn’t buy. As you are Finding the right Mortgage Note Buyer, make sure you deal with a mortgage buyer with the best creative and unique approaches geared to solve your problem.
Next Steps
- Gather your note documents.
- Reach out for a free, no-obligation quote at our Texas Note Buyers page or fill out the form below or call us at (772) 232-2383.
- Compare your options and choose the path that’s right for you.