How to Sell a Non-Performing Land Note in Texas: 2026 Recovery Guide

To sell a land note in Texas, you submit your note details to a direct buyer, receive a cash offer (typically within 24 hours), complete a due diligence process, and close in as little as two to four weeks with funds wired directly to your account. There are no broker fees when you sell directly, and the borrower's loan terms remain completely unchanged throughout the transaction. Longhorn Note Buyers — a direct buyer based in San Antonio with an A+ BBB rating and over $47 million in Texas notes purchased since 2007, delivers guaranteed cash offers within 24 hours with no broker fees or hidden costs.

This guide walks you through the full process of selling a land note in Texas in 2026, from understanding what your note is worth to receiving your funds at closing.

What Makes a Land Note Non-Performing?

A note becomes non-performing when the buyer misses payments (typically 30-90+ days late) or stops entirely.

• Common causes: buyer financial hardship, property issues, disputes.
• Impact: You stop receiving income, risk property taxes/insurance, face foreclosure costs.

Unlike performing notes (see discount guide), non-performing sell at steeper discounts due to recovery work.

Pricing Expectations for Non-Performing Notes in 2026

Discounts are higher because buyer assumes default risk and foreclosure/recovery costs:

• Partially performing (late but recoverable): 40-60% discount
• Fully non-performing (stopped 6+ months): 50-80% discount
• Severe cases (liens, damaged property): 70-90%+ discount

Value comes from underlying land equity — low LTV still helps.

The Recovery Process When Selling Non-Performing

Direct buyers like us handle everything:

1. Evaluate note and property (desktop + drive-by valuation).
2. Quote based on recovery potential.
3. Due diligence (title, liens, payment history).
4. Close and fund you.
5. We pursue reinstatement, workout, or foreclosure/post-foreclosure sale.

You get cash upfront — we take the risk. Requires solid documents.

Texas-Specific Legal Considerations for Non-Performing Notes

• Deed of Trust: Non-judicial foreclosure — fast (60-90 days posting).
• Contract for Deed (Chapter 5): Stricter rules — forfeiture process, buyer rights, disclosures.
• Homestead claims: Can complicate foreclosure if buyer claims homestead.
• Tax liens: Must be addressed.

We know Texas law inside-out — critical for non-performing.

Timeline for Selling Non-Performing Notes

Longer than performing: 4-12 weeks due to extra verification/recovery planning.
See full timelines comparison.

Your Options Besides Selling

• Foreclose yourself: Expensive ($5K-$20K+), slow, risky.
• Workout with buyer: Reinstate payments (hard if already stopped).
• Deed in lieu: Buyer voluntarily returns property.

Selling often fastest cash solution.

Tips to Maximize Cash from Non-Performing Note

1. Act early — longer default = lower value.
2. Provide all documents and default details.
3. Get quotes from specialists (not general buyers).
4. Consider partial structures if some payments possible.
5. Avoid brokers — fees cut deep on already discounted notes.

Compare direct vs broker.

Real Recovery Examples (Anonymized)

• Note stopped 8 months: $100K balance, rural land → sold for $45K cash (buyer foreclosed and resold).
• Late payments recoverable: $80K balance → $50K cash, buyer reinstated.
• Contract for deed default: Complied with Chapter 5 → smooth transfer.

Common Myths About Non-Performing Notes

• Myth: "Worthless" → Land equity almost always has value.
• Myth: "No one buys them" → Specialists like us do regularly.
• Myth: "Same price as performing" → No, but still cash positive.

Avoid related mistakes like waiting too long.

Frequently Asked Questions

Don't let a defaulted note drain you. Call Sandy Henderson at (210) 828-3573 or submit your note details — even non-performing notes turn into cash fast with the right buyer.