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The seller says they owe $118,000 on the mortgage — how do you check that?
Everything a seller tells you on the first call is testimony, not evidence. Four things need a document behind them before you build an offer on top of the number.
A seller telling you 'I owe about $118,000' is giving you their best recollection, not a number a title company or a lender would sign off on. That's not usually a lie — people round, forget an escrow shortage, or haven't looked at a statement in months — but the gap between 'about $118,000' and the real figure is exactly where a deal that looked fine on the phone stops working once you're underwritten into it. Four things need independent verification before an offer goes out, not after.
The four things to verify, in the order they usually matter
- The loan balance itself. A payoff statement from the actual servicer — dated, with a per-diem for every day past that date — is the only number worth underwriting against. A seller's memory, an old statement, or a guess based on the original loan amount minus 'however many years of payments' is not the same figure, and the gap tends to run in one direction: higher than remembered, not lower.
- The arrears, if there are any. How far behind is measured in dollars owed to cure, not months missed — a reinstatement quote from the servicer states the exact figure, and it's a different number from the full payoff, easy to get backwards under pressure.
- The title position. A property can carry a second mortgage, a HELOC, a contractor's lien, a judgment, or an HOA lien the seller never mentioned because they've stopped thinking about it — a title search or an owner-and-encumbrance report surfaces all of it, and any one of those can sit ahead of a note you'd otherwise structure as if it were the only debt on the property.
- Who actually owns it. In a probate or a multi-heir situation especially, the person on the phone isn't always the only name that has to sign — a spouse not on title, a co-heir who hasn't agreed to sell, or a trust that owns the property rather than a person can each stop a closing that everyone thought was settled.
Watch out — The check that would have prevented an $80,000 mistake
A recorded case in creative-finance investor training describes exactly this failure: the entry math was run against a seller's self-reported loan balance instead of a servicer-issued payoff figure, the real balance came in meaningfully higher, and the buyer ended up carrying an unplanned shortfall north of $80,000 after already committing to the deal. The mistake wasn't the negotiation or the structure — it was treating a remembered number as a verified one. A payoff quote costs a phone call and a short wait; an unverified number can cost five figures discovered after closing.
None of this is about distrusting sellers — it's about the fact that even an honest seller's number and a servicer's statement can legitimately differ by thousands of dollars once accrued interest, an escrow shortage, or a fee they'd forgotten about is added back in. Ask for the documents as a routine step, the same way you'd ask for a driver's license at closing, rather than as an accusation.
The tool below shows what a real payoff figure is actually made of — principal, accrued interest since the last payment, outstanding fees, and a per-diem that keeps ticking until funds arrive — so you know exactly what to ask the servicer for, and what a seller's rough number is missing.
Run it yourself
Check yourself
1. A seller has an active notice of default. What does that fact alone tell you about their remaining equity?
2. A seller tells you they owe about $118,000 on their mortgage. What should that number be treated as, before you build an offer on it?
3. Besides the loan balance, what else needs independent verification before committing to a seller-financed deal?