If you sold property in South Carolina and carried the financing, you can sell that note for cash. You can sell all of it or just part of the payments. This guide covers how SC deals get written, the rules that matter, and how a sale works.
I buy South Carolina notes. Here's what I look at.
Short version: Most SC owner financing uses a note and a mortgage. Foreclosure goes through the courts, so it takes longer. Some deals use a bond for title instead. Those can sell too, but a buyer will look closely at them.
Two kinds of SC seller financing
1. A note with a mortgage. This is the most common setup. You deed the property to the buyer at closing. They sign a promissory note and a mortgage that secures it. You hold the lien. This is the easiest kind of note to sell.
2. A bond for title. This is South Carolina's name for a contract for deed or land contract. You keep title until the buyer pays in full. Then you deliver the deed.
Not sure which you have? If the buyer got a deed at closing, you likely have a mortgage. If you still hold title, it's a bond for title.
Notes with a mortgage
South Carolina is a judicial foreclosure state. If a payer stops paying, the lender has to file a case in court. A judge or a master-in-equity handles it, and the property is sold at a public sale.
- It takes longer. Court foreclosure takes more time than in states like Texas or Arizona.
- The bidding can stay open. If the lender asks for a deficiency judgment, the bidding often stays open for 30 days after the sale.
Longer foreclosure means more risk for a buyer. That's built into the price. A strong payer with good equity offsets a lot of it.
Bond for title in South Carolina
South Carolina doesn't have one big law just for bonds for title. The rules come from court cases and general statutes. Here's what matters:
- Record it. A bond for title should be recorded with the county. If it isn't, it may not protect the buyer, or you, against later liens and buyers.
- The seller can't just cancel. A 2014 opinion from the SC Attorney General said a seller can't cancel on their own, even if the contract says so. The buyer's notice and right to cure rules still apply.
- Courts don't like forfeitures. In Lewis v. Premium Investment Corp. (2002), the SC Supreme Court said a forfeiture clause can be an unfair penalty. A buyer who has paid a lot may get a chance to pay off and keep the home.
In plain terms, getting the property back on a bond for title often means going to court. A buyer will price it that way.
Other SC rules to know
- Attorneys handle closings. South Carolina requires an attorney to oversee real estate closings. Plan on that when you sell.
- Consumer rules can apply. South Carolina's consumer protection code has notice and right to cure rules. Courts have applied them to some land contracts.
- Licensing rules can apply. SC has licensing rules for people who make home loans. Some seller financing is exempt. A buyer will check that your deal fits.
I'm not a lawyer. For legal questions about your mortgage or bond for title, talk with a South Carolina real estate attorney.
Why this affects your price
A note buyer is buying your right to collect. They also take on the risk that the payer stops paying. In South Carolina, getting the property back takes a court case. A buyer factors that time and cost into the price.
The flip side: a payer who has paid for years has real equity. They have a lot to lose, and they rarely walk away. Equity and payment history matter most here.
What a buyer will check
I look at three things on every deal: the payer, the property, and the paperwork.
- The payer. On-time history, how long they've paid, and whether they live in the home.
- The property. What it's worth, its condition, and whether taxes and insurance are current.
- The paperwork. The signed note and mortgage, or the bond for title. Proof it was recorded. Your closing statement. Any title policy.
How the sale works, step by step
- Get a quote. Send the balance, rate, payment, and payment history. Start here.
- Send copies of your papers. See the documents you need to sell a mortgage note.
- Due diligence. I order a title search and a property value check, then confirm the balance with your payer. Plan on two to three weeks.
- Close. You sign an assignment of the mortgage and endorse the note. An SC attorney oversees the closing. You get paid.
- Your payer gets a letter. It tells them where to send payments. Their terms don't change. Read what happens to the payer when you sell.
Most sales close in about four to five weeks.
What your SC note is worth
Most notes sell for less than the balance, because the buyer pays you today for payments that come in over years. Typical notes sell for about 70% to 85% of the balance. Strong ones can bring more. Thin-equity notes and unrecorded bonds for title come in lower.
Try the note value calculator for a rough range. Or get a real quote. A partial sale can help too. A shorter stretch of payments means less risk for the buyer and a better rate for you.
Frequently asked questions
Can I sell a bond for title in South Carolina?
Usually, yes. The buyer will want it recorded and will look closely at the payer's equity and history. Expect a bit more review than on a mortgage note.
Is a mortgage note easier to sell than a bond for title in SC?
Yes, in most cases. It's the standard setup, and the foreclosure steps are clear, even if they take longer.
Do I need my payer's permission to sell?
Usually not. Most notes can be sold without the payer's consent. Check your paperwork for any clause about assigning it.
Does foreclosure taking longer in SC mean I can't sell?
No. It means a buyer prices in more time. A good payer with solid equity still sells well.
How long does it take to sell?
Most close in about four to five weeks from the first quote.
Will I owe taxes when I sell?
You might. South Carolina has a state income tax, and federal tax applies too. Read taxes when you sell an owner-financed note and talk with your CPA.
Selling in North Carolina instead? Read how to sell an owner-financed note in North Carolina.
Larry has invested in real estate since 2006 and has bought more than 300 mortgage notes. He runs LJH Investments, LLC, an Ohio company based in Madison, Indiana. More about Larry
This article is general information, not legal or tax advice. Laws change. Talk with your own attorney and tax adviser about your situation.