Title company drafting promissory notes?

[Robert Lorenz]

I was reading an article (maybe the Brandon Turner blog post on buying a 4-plex that turned out to be a 5-plex?) and it said something about the title company drafting the note... can I do that in a seller finance situation?  If the seller and I come to terms and both sign off on a write-up, will the title company draft the actual note for the seller?

[Michael Boyer]

On my owner financing deal (I was seller) the title company had an attorney they use draft the terms in the standard promissory note (our agreed on rate, am period, etc). But good news-- it was only $100. Seemed reasonable to me. And the attorney even had recommended late fee language to add. We used standard documents (deed of trust etc) that buyers and sellers in my area use for any closing.

I seem to recall the closing person did not want to draft any notes/couldn't do it (technically was practice of law or something)... But there may be some jurisdictions where pre-printed or fill in the blank forms might be used/supplied. I would ask them ahead of time or seek professional advice. 

I will say it was worth it (peace of mind) to have the transaction done with professionally prepared standard forms, filings, recordings, etc. We also set up an escrow account (also reasonable) with a local bank that does all the statements and accounting (so the buyer technically pay the bank and gets statements from them, and the funds go in my account).

Find a title company that works with owners finance transactions and FSBO's and ask about the standard practices and fees.

The note is my most reliable check every month (and easiest--no tenant calls, maintenance, etc). I've even got dozens of offers (unsolicited) to buy the note. Not selling. A first note holder on a creditworthy buyer is a nice place to be (especially with well above market interest rates). Good to be the bank....

Best of luck.