How does a Promissory note work?

Both people create the note. A promissory note is simply an agreement that states an obligation to pay as well as the terms and length at which to pay back the note. If the seller is selling a property by carrying back the note, he will negotiate with the buyer terms (interst rate, late fees, purchase price, etc) and length of the note (how long it will take the buyer to pay the seller his money). Most importantly it is signed by both parties. If you are asking who drafts the papers to be signed, it would be the seller.

It is best for both parties to have a copy of the contract in-order prevent unnecessary disagreements, and proof of what was agreed upon in writing.

If you sign a promissory note with someone, you are not legally "required" to record it at the courthouse, but it would be very wise to do so if YOU are the one carrying the note.

Kris, question. Can you give some details of how to sell a note? What types of notes do you buy? If a person finances say the downpayment portion of a sale, I'm guessing this would be held as a second mortgage. How would a person go about selling that?

I'm planning to run an ad next week for a prop I'm buying. I thought when I re-sell, I'd rather offer to finance the downpayment than seller-finance with money down. Might make it easier to get a buyer, and more for me up-front. Any thoughts?

Thanks, Rina