The buyer's diligence found the one thing I had stopped thinking about on my own note

A useful case for anyone carrying seller financing on a note they plan to eventually sell. A seller carries a balance at 8.5 with a twenty year amortization on a five year balloon after rehabbing and selling a house to a buyer who could not get conventional financing. Payments arrive on the first of the month for over two years without issue, and the note becomes easy to stop thinking about. When the note eventually goes to market, a serious buyer's diligence list often turns up something the seller stopped tracking, commonly proof of current hazard insurance with the note holder named as mortgagee. It is not unusual for a borrower to switch carriers to save money and never forward the new declarations page, especially on a handshake arrangement with a recorded mortgage and no servicer collecting escrow. Months can pass with the collateral effectively uninsured without the note holder knowing. A lapse like that typically gets fixed within a couple weeks once caught, but a buyer who finds it will usually reprice the note lower, reasoning that a seller who does not know the insurance status likely does not know the tax status either. Checking the county tax record before marketing a note is a cheap way to avoid that exact conversation. The broader lesson: seller financed notes without a servicer need someone actively confirming insurance and taxes on a schedule, not just collecting the check.