Sell Your Waterfront Land Note in Texas — A Complete Guide

If you hold a promissory note secured by waterfront property in Texas, you are sitting on one of the more valuable types of land notes in the secondary market. Whether your note is tied to a lakefront cabin lot on Lake Travis, a riverfront parcel along the Guadalupe, or a coastal tract near Galveston Bay, waterfront land notes attract consistent buyer interest because of the underlying collateral's inherent desirability. The decision to sell a waterfront land note in Texas is one that thousands of note holders consider each year, and understanding the process thoroughly can mean the difference between a mediocre offer and a truly competitive one.

Texas is home to more than 7,000 named lakes and reservoirs, hundreds of miles of coastline along the Gulf of Mexico, and countless rivers and creeks that wind through the Hill Country, East Texas piney woods, and the Blackland Prairie. That geographic diversity means that waterfront land notes come in an enormous range of configurations — from five-figure notes on modest stock tank parcels in West Texas to six-figure notes on premier lakefront lots in the Highland Lakes chain. Regardless of where your waterfront collateral sits on that spectrum, the fundamentals of selling the note remain the same, and this guide will walk you through every step of the process so you can make an informed decision.

Throughout this guide, you will learn what makes waterfront collateral unique in the eyes of note buyers, how pricing and discounts work for this specific property type, what documents you should have ready, and how the timeline unfolds from first quote to final funding. By the end, you will have a clear picture of whether selling your waterfront land note is the right move for your financial goals and how to maximize the cash you receive at closing.

Why Waterfront Land Notes Command Premium Pricing in Texas

The Scarcity Factor Behind Waterfront Values

Waterfront land is, by definition, a finite resource. Texas may be enormous, but the linear footage of shoreline along its most desirable lakes, rivers, and coastal stretches does not grow. That scarcity is the single biggest reason why waterfront land notes tend to receive stronger offers than notes secured by comparable-sized inland parcels. When a note buyer evaluates collateral, one of the first questions they ask is how easily the property could be resold if the borrower defaulted. Waterfront parcels almost always have a deeper pool of potential end buyers than landlocked tracts, which reduces the risk profile of the note and translates directly into better pricing for the seller.

Consider the difference between a five-acre tract in a rural county with no water features and a five-acre tract with two hundred feet of frontage on a popular bass fishing lake. Both might be valued at similar per-acre rates in their respective markets, but the waterfront tract is far more liquid. Recreational buyers, retirees, vacation home builders, and investors all compete for waterfront lots, whereas the inland tract might appeal primarily to ranchers or hunters. That liquidity premium is something experienced note buyers recognize and reward when they calculate their purchase price.

How Texas Water Bodies Affect Note Value Differently

Not all waterfront is created equal, and the type of water body your collateral sits on has a measurable impact on what a buyer will pay for the note. Generally speaking, notes secured by property on major recreational lakes like Lake Conroe, Lake Livingston, Canyon Lake, or Lake Travis command the strongest offers because those lakes have established real estate markets with robust comparable sales data. A note buyer can verify the collateral's value with confidence, which means less risk and a smaller discount to you.

River frontage notes occupy a middle tier. Properties along well-known waterways such as the Brazos, Colorado, Guadalupe, Frio, and San Marcos rivers hold strong recreational appeal, but valuations can be trickier because river parcels vary dramatically depending on whether the frontage includes usable water access, how steep the banks are, and whether the property sits in a flood zone. Coastal notes — those secured by lots near the Gulf — can be excellent collateral, but they come with additional considerations around hurricane risk, flood insurance requirements, and erosion patterns that can affect both the property's value and the buyer's confidence in long-term collateral stability.

Recreational Demand as a Safety Net for Note Buyers

One of the hidden advantages of selling a waterfront land note in Texas is that recreational demand provides what amounts to a safety net for the note buyer. Even during economic downturns, Texans' appetite for weekend getaway properties near water has proven remarkably resilient. The population growth in metropolitan areas like Dallas-Fort Worth, Houston, San Antonio, and Austin continues to push demand for recreational waterfront lots within a two- to three-hour drive of those cities. Note buyers who specialize in Texas land are well aware of this trend, and they factor it into their pricing models. The stronger the recreational demand in the area surrounding your collateral, the more aggressively a buyer can price your note because they know the collateral will hold value even in a soft market.

Key Factors That Determine Your Waterfront Land Note's Value

The Borrower's Payment History and Creditworthiness

While the waterfront collateral is the foundation of your note's value, the borrower's payment history is what builds the structure on top of that foundation. A note with twenty-four or more months of consecutive on-time payments will receive a significantly better offer than an identical note with only three or four months of history, regardless of how beautiful the lakefront lot might be. Note buyers want to see that the borrower has demonstrated both the willingness and the ability to make payments consistently. If your borrower has never missed a payment and has been performing for several years, you are in an excellent position to sell. For a deeper understanding of how payment history and other variables affect what buyers will pay, take a look at this resource on what determines note value in Texas.

Beyond raw payment history, some buyers will also consider the borrower's credit profile, employment stability, and overall financial picture. These factors matter more for notes with shorter seasoning periods or higher loan-to-value ratios, where the buyer is taking on more risk. If you happen to know that your borrower is in a strong financial position, sharing that information during the quote process can sometimes improve your offer.

Loan-to-Value Ratio and Waterfront Appraisal Considerations

The loan-to-value ratio — typically abbreviated as LTV — is the relationship between the remaining balance on the note and the current market value of the waterfront property. A lower LTV is always better for the note seller because it means the buyer has a larger equity cushion protecting their investment. For waterfront parcels, LTV calculations can be more favorable than you might expect. If you originated the note several years ago and waterfront property values in your area have appreciated — as they have in most Texas lake markets over the past decade — the current LTV may be substantially lower than it was at origination, even if the borrower has only been making interest payments.

One important consideration specific to waterfront notes is that appraisals can sometimes be challenging because comparable sales may be limited, especially for parcels on smaller or less popular water bodies. Note buyers who have deep experience in Texas land will know how to navigate these appraisal nuances and may use a combination of comparable sales, tax appraisal data, and their own market knowledge to arrive at a fair collateral value. Working with a buyer who understands waterfront valuation is critical to getting an accurate and competitive offer.

Note Terms — Interest Rate, Remaining Balance, and Amortization

The financial terms of your note have a direct impact on the price a buyer will pay. Higher interest rates are more attractive to buyers because they generate more income on the investment, which typically translates into a smaller discount for you. The remaining balance matters too — notes with larger remaining balances are generally more cost-effective for buyers to acquire because the fixed costs of due diligence, title work, and closing are spread over a bigger investment. A note with a remaining balance of $80,000 will often receive a better percentage-of-balance offer than an otherwise identical note with only $15,000 remaining.

The amortization schedule also plays a role. Fully amortizing notes with level monthly payments are the easiest for buyers to price and tend to receive the best offers. Notes with balloon payments can still be sold, but the buyer will factor in the risk that the borrower may not be able to refinance or pay the balloon when it comes due. If your waterfront land note includes a balloon payment, it does not mean you cannot sell — it simply means the buyer will adjust their pricing to account for that additional risk layer. You can learn more about how discounting works for different note structures by reading about discounts when selling a land note in Texas.

Access, Utilities, and Physical Characteristics of the Waterfront Parcel

Waterfront land notes are unique because the physical characteristics of the collateral play a larger role in pricing than they would for a suburban lot or a commercial parcel. Note buyers care about whether the waterfront property has legal road access, whether utilities are available at the lot line or would need to be brought in, whether the shoreline is usable for recreation or is a muddy cliff face, and whether any portion of the lot falls within a FEMA-designated flood zone. Properties with deeded water access, gentle slopes to the water, existing boat docks or the right to install one, and available electricity and water service will always support stronger note pricing than raw, inaccessible tracts with nothing but a paper survey and a distant view of the lake.

If your note is secured by a waterfront parcel with improvements — even modest ones like a cleared building pad, a septic system, a well, or a boat ramp — those improvements add value to the collateral and can improve your offer. Make sure to mention any improvements when you request a quote, as they may not be apparent from tax records alone.

Documents You Need to Sell Your Waterfront Land Note

The Core Documents Every Note Buyer Requires

Selling a waterfront land note in Texas requires essentially the same core documentation as selling any other type of land note. At minimum, you will need the original promissory note, the deed of trust or contract for deed that secures the note against the property, and a current payment history showing dates and amounts of all payments received. Most buyers will also want to see a copy of the warranty deed or special warranty deed that transferred the property to the borrower, along with any title insurance policy that was issued at the time of origination.

Having these documents organized and ready to share will speed up the quote process dramatically. In many cases, a buyer can provide you with a preliminary offer based on just the note, the security instrument, and the payment history. The remaining documents will be needed during due diligence but are not always required upfront. For a comprehensive checklist of everything you might need, review this guide on documents needed to sell a land note in Texas.

Waterfront-Specific Documentation That Can Strengthen Your Sale

Beyond the standard documents, waterfront land notes benefit from having a few additional pieces of documentation that address the unique aspects of the collateral. If you have a survey that shows the waterfront boundaries, the linear feet of shoreline, and any easements or setback lines, that document is extremely helpful. Buyers want to know exactly how much waterfront frontage the property includes and whether there are any restrictions on how close to the water the borrower can build.

If the property is on a lake managed by a river authority — such as the Lower Colorado River Authority, the Brazos River Authority, or the Guadalupe-Blanco River Authority — there may be specific permits, lease agreements, or shoreline use regulations that apply. Having copies of any permits for docks, retaining walls, or other shoreline improvements can reassure the buyer that the property is in compliance and that its value is not at risk from regulatory issues. Similarly, if the property has a flood zone determination letter showing that the buildable area is outside the floodplain, that document can positively influence pricing because it reduces the perceived risk associated with the waterfront location.

What to Do If You Are Missing Documents

It is not uncommon for note holders to have misplaced one or more documents over the years, especially if the note was created a decade or more ago. The good news is that most critical documents can be reconstructed or obtained from public records. The deed of trust or contract for deed should be recorded in the county clerk's office and can be retrieved for a small fee. Payment records can be reconstructed from bank statements or servicing company records. Title companies can run new title searches to establish the current state of title if the original title policy is missing.

An experienced note buyer will guide you through the process of obtaining any missing documents and will not penalize you unfairly for the absence of paperwork that can be replaced. The one document that truly matters is the original promissory note, because the note itself is the instrument that evidences the debt. If you have lost the original note, the situation becomes more complex but is not necessarily fatal to the sale — a lost note affidavit combined with other supporting documentation can sometimes satisfy the buyer's requirements, though you should expect the process to take a bit longer.

The Pricing and Discount Structure for Waterfront Land Notes in Texas

Understanding Why Buyers Discount Notes

If you are new to the world of note sales, you may be surprised to learn that note buyers do not pay face value for promissory notes. This is a fundamental aspect of the secondary note market, and understanding why buyers discount is essential to setting realistic expectations. When a buyer purchases your note, they are making an investment. They need to earn a return on that investment that compensates them for the risk they are taking — the risk that the borrower might stop paying, that the collateral might decline in value, or that they might need to foreclose and resell the property. The discount is the mechanism through which the buyer ensures an adequate return, and it is analogous to the discount that bond investors require when purchasing fixed-income securities.

For waterfront land notes in Texas, the discounts tend to be more favorable than for many other types of land notes. This is because the waterfront collateral is typically more valuable per acre, more liquid in the resale market, and more likely to appreciate over time. A buyer purchasing a well-seasoned waterfront land note with strong payment history and a low LTV might purchase it at a discount in the range of ten to twenty percent of the remaining balance, while a similar note on landlocked rural acreage might command a discount of twenty to thirty percent or more. These ranges are general guidelines — every note is unique, and the actual discount will depend on the specific combination of factors present in your deal.

How Location Along the Water Affects Your Discount

As mentioned earlier, the specific water body associated with your collateral has a significant impact on pricing. Notes secured by property on Texas's most popular and well-established lakes generally receive the best pricing because the liquidity of the underlying real estate market reduces the buyer's risk. If your note is on a property at Lake Travis, Lake Conroe, Lake Livingston, Possum Kingdom Lake, or Toledo Bend, you are likely looking at pricing that is toward the more favorable end of the spectrum.

Notes on smaller, more remote lakes or on rivers and creeks where comparable sales are sparse will typically see somewhat deeper discounts, not because the property is undesirable, but because the buyer has less data to work with when estimating collateral value. The same principle applies to coastal notes — while Gulf Coast waterfront is highly desirable, the additional risks associated with storm damage, erosion, and mandatory flood insurance can push discounts slightly higher than they would be for an equivalent inland lake note. Understanding where your property falls on this continuum will help you evaluate any offers you receive with appropriate context.

Strategies to Minimize Your Discount

There are several practical steps you can take to minimize the discount a buyer applies to your waterfront land note. First, allow the note to season for as long as possible before selling. A note with two or more years of perfect payment history will always command better pricing than a brand-new note with only a few payments recorded. Second, make sure you have complete documentation organized and ready to share, as we discussed in the previous section. Missing documents create uncertainty, and uncertainty increases discounts. Third, consider whether a partial sale might achieve your financial goals — by selling only a portion of your payment stream, you may be able to receive a smaller discount on the payments you do sell while retaining the right to the remaining payments. You can explore this option further in this article on full versus partial land note sales.

Fourth, work with a direct buyer rather than a broker. When you sell through a broker, the broker takes a commission that ultimately comes out of your proceeds. By selling directly to a buyer who uses their own capital, you eliminate that middleman cost and put more money in your pocket. Longhorn Note Buyers is a direct buyer that has been purchasing Texas land notes since 2007, and working with a direct buyer like Longhorn ensures that every dollar of the purchase price goes to you.

The Step-by-Step Process of Selling Your Waterfront Land Note

Getting Your Initial Quote

The process of selling a waterfront land note in Texas begins with getting a quote from a reputable note buyer. At its most basic, you will need to provide the buyer with key information about your note — the remaining balance, the interest rate, the monthly payment amount, the number of payments remaining, and a description of the waterfront collateral including its location, acreage, and any improvements. Most buyers can provide a preliminary quote within twenty-four hours of receiving this information, and some can do it even faster.

When you contact a buyer for a quote, pay attention to how they handle the initial conversation. A reputable buyer will ask detailed questions about both the note terms and the collateral, will be transparent about how they arrive at their offer, and will not pressure you into a quick decision. If a buyer gives you a number without asking questions or seems unwilling to explain their pricing, that is a red flag. The best buyers in the Texas market take the time to understand your specific situation because they know that a well-analyzed quote is more likely to lead to a successful closing for both parties.

Due Diligence and Title Work

Once you accept a quote and sign a purchase agreement, the buyer will begin their due diligence process. For waterfront land notes, this typically includes ordering a title search to confirm clear title to the property, reviewing all loan documents for legal compliance, verifying the borrower's payment history independently, and assessing the current market value of the waterfront collateral. The buyer may also review flood zone maps, check for any environmental issues associated with the waterfront location, and confirm that any shoreline improvements are properly permitted.

The due diligence phase usually takes two to four weeks, though it can sometimes be shorter for straightforward deals with clean title and complete documentation. During this period, the buyer's closing team or attorney will prepare the assignment documents that will transfer ownership of the note from you to the buyer. You should continue collecting payments from your borrower during this period — any payments received between the date of the purchase agreement and the date of closing will typically be addressed through a proration at the closing table.

Closing and Receiving Your Funds

The closing process for a note sale is considerably simpler than a real estate closing. In most cases, you will sign an assignment of the deed of trust or contract for deed, an allonge endorsing the promissory note to the buyer, and a settlement statement showing the purchase price and any prorations. These documents can usually be signed remotely through a mobile notary or at a local title company, so you do not need to travel to complete the sale.

Once the signed documents are received and verified, the buyer will wire your funds directly to your bank account. From the time you sign closing documents to the time money hits your account, you are typically looking at one to three business days. The entire process from initial quote to money in your account can take as little as two to three weeks for a clean deal, or up to six weeks for more complex situations involving title issues or missing documentation. After closing, the buyer will send a notice to your borrower informing them that the note has been transferred and providing new payment instructions. Your obligation as the note holder ends at closing, and you are free to use your lump sum however you see fit.

Ready to Sell Your Note?

If you are holding a waterfront land note in Texas and you are ready to explore your options, Longhorn Note Buyers would like to hear from you. With over $46 million in Texas notes purchased since 2007 and a 100% close rate on quoted deals, Longhorn has the experience and capital to make you a competitive offer on your waterfront land note — typically within 24 hours of receiving your information. Whether your note is secured by a lakefront lot on Canyon Lake, a riverfront tract in the Hill Country, or a coastal parcel near Rockport, Longhorn's team understands waterfront collateral and will price your note fairly.

Call today at (210) 828-3573 or visit longhornnotebuyers.com to request your free, no-obligation quote. There is no cost to find out what your waterfront land note is worth, and you are under no pressure to accept. Longhorn Note Buyers has earned an A+ rating with the Better Business Bureau by treating every note holder with honesty and respect, and they would be happy to answer any questions you have about the process.

Frequently Asked Questions About Selling Waterfront Land Notes in Texas

Do waterfront land notes sell for more than regular land notes?

In most cases, yes. Waterfront land notes typically receive better offers than comparable inland land notes because the underlying collateral is more desirable and more liquid. Note buyers recognize that waterfront property in Texas has strong and consistent demand from recreational buyers, retirees, and investors, which means the collateral is easier to resell in a foreclosure scenario. This reduced risk profile allows buyers to offer a smaller discount, which means more money in your pocket. The exact premium will depend on the specific water body, the quality of the waterfront access, and the overall condition of the note, but as a general rule, waterfront collateral is a positive factor in any pricing analysis.

Does the type of water body affect my note's value?

Absolutely. Notes secured by property on major recreational lakes with established real estate markets tend to command the best pricing because buyers can easily verify collateral values through comparable sales. River frontage notes are also attractive but may receive slightly different pricing depending on the usability of the water access and whether the property is in a flood zone. Coastal notes carry additional considerations around hurricane risk and erosion that can affect pricing. Regardless of the specific water body, waterfront collateral is generally viewed favorably by experienced Texas note buyers who understand the long-term demand dynamics of waterfront property in the state.

Will flood zone status hurt my note's value?

Flood zone status does not automatically disqualify a waterfront land note from being sold, but it can influence the pricing a buyer offers. If a significant portion of the property, including the primary building area, is located within a FEMA-designated Special Flood Hazard Area, the buyer will factor in the risk of flood damage to improvements and the cost of mandatory flood insurance for the borrower. However, many waterfront properties in Texas are only partially within flood zones, with the buildable areas safely outside the floodplain. Having a flood zone determination letter or an elevation certificate that shows the building area is above the base flood elevation can help mitigate any pricing impact. The key is transparency — share what you know about the property's flood zone status upfront so the buyer can price the note accurately from the start.

Can I sell a waterfront land note if the property has no improvements?

Yes, you can absolutely sell a waterfront land note on raw, unimproved land. Many waterfront land notes in Texas are secured by vacant lots that the borrower purchased with the intention of building in the future, and note buyers purchase these notes regularly. The absence of improvements means the collateral value is based entirely on the land itself, which is straightforward for buyers to evaluate. While improvements like a septic system, well, boat dock, or cleared building pad can add value to the collateral and potentially improve your offer, they are not required for a successful sale. The most important factors remain the quality of the waterfront location, the borrower's payment history, and the financial terms of the note itself.

How quickly can I sell my waterfront land note in Texas?

The timeline for selling a waterfront land note in Texas varies depending on the complexity of the deal, but most transactions close within two to four weeks from the date you accept an offer. The initial quote can usually be provided within 24 hours, and the remaining time is consumed by due diligence, title work, and document preparation. Clean deals with complete documentation, clear title, and a cooperative borrower can sometimes close even faster. If there are title issues, missing documents, or other complications, the timeline may extend to five or six weeks. Throughout the process, a reputable buyer will keep you informed of progress and will not keep you guessing about when to expect your funds.