Real estate notes are frequently referred to as “real estate receivables” and are used when a piece of land or real estate is sold. These legal documents assign buyer rights and record details of the transaction. Common real estate notes include mortgage notes, land contracts, or a contract sell where the buyer makes cash payment directly to the seller.

In a nutshell, real estate notes are used as collateral and to document the promise to pay the note. Frequently used with mortgages, real estate notes aide in the financing of real property. They are almost always used when the seller offers seller carry back financing. This type of real estate transaction is used with the seller of the property carries a portion or the entire amount of the loan. Typically, sellers carry back between 10 and 40 percent of the note and the buyer retains the balance from traditional lending sources.