Few things are worse than realizing after the fact, that you could have gotten a larger lump sum of cash for selling a structured settlement or annuity payment. You probably would not be considering selling a structured settlement if you did not need the money. It is not overly difficult to sell structured settlements direct, but you do need to understand the basics in order to get the best offer for your future structured settlement payments.
Quotes from different Structured Settlement companies can vary dramatically and are often difficult to compare. Inception charges should be your first red flag as you should have to commit to nothing and pay nothing to get a quote. Know also, that the longer a structured settlement company takes to give you your money, the more they may profit. Delaying the transfer of payments and surprising people with fees is not uncommon.
It is not hard to compare offers side by side if you insist on a ‘Net’ number. The amount of the offer needs to match your check or wire transfer at closing. You do not have to be a financial guru to understand that a payment today is worth more than a payment tomorrow. Although transfer expenses, legal fees and Court costs effect offers from structured settlement buyers, nothing has a greater impact on your ‘NET’ number than the rate of return the investor desires on their money.
Let’s use a basic example: If someone offered you a lump sum of $100,000 today or you could have the same $100,000 6 years from today, you would most likely accept the $100,000 today. Even if you put the money into something guaranteed at less than 1% and just left it alone, you would have more than the initial $100,000 at the end of 6 years… maybe not that much more in this low interest example, but more. Apart from potentially giving up a guarantee, it makes financial sense in this example for you to take the offer today as opposed to waiting.
If someone offered you the same $100,000 today or $10 million 6 years from now the decision would be even easier. It would not be easy for anyone to turn $100,000 into $10 million in only 6 years. It would seem prudent to wait the 6 years for such an enormous difference.
If the offer was for you to take $100,000 today or $200,000, 6 years from today, it is more difficult to decide which is best at first glance, without making some major interest rate assumptions. If you took the $100,000 now, you would have to more than double it over the 6 year time period with all else equal. That would mean you would need to get a net interest rate of about 12% to double your money in a 6 year timeframe. A 12% return would not be easy without assuming risk and is certainly not a guarantee.
Structured settlement buyers look at things in much the same way. Buyers, in essence, take the interest rate that they would be comfortable with and work backwards to arrive at a quote for your future settlement payments.
To tie things in with our example, let’s assume that the offer of $100,000 today does not exist and all you have is the $200,000 offer at the end of 6 years. How much is it worth if you need money now? For this example, assume the buyer wants to get 12% on their money. Your offer would be for $100,000 today and the buyer would receive your payment of $200,000 at the end of 6 years. The $100,000 would be the ‘present value of your future payment’ of $200,000. Court costs, transfer costs and fees are all factors as well in an actual structured settlement transfer, but the basis of the time value of money is the same. The lower the rate of return that the buyer will accept equates to a higher offer to you.
If the structured settlement buyer would accept 8% (in this example) your offer would be closer to $125,000, but if they desired an 18% rate of return, your offer would be less than $75,000. The $50,000 difference between the offers is solely due to the change in interest rate.
Structured settlement payment streams often are comprised of monthly, quarterly or annual payments for a period of time, more than one lump cash release over years or various combinations of both. Regardless of how intricate and complex your payment stream is, the underlying calculation that the buyer uses will consider everything and their corresponding offer will be based on the rate of return that they wish to achieve. If you are considering the transfer of some of your payments, desire a specific amount or wish to sell the fewest amounts of future annuity payments to achieve your goal; there may often be many ways to address your need.
Again, sometimes it is extremely difficult to compare offers when companies utilize different approaches when purchasing various portions of your future structured settlement payments. That is why it is imperative to insist on a ‘Net’ number. It is also prudent to make sure that all offers reflect the same exact terms for the same payments so that you can truly make a comparison.
Our direct, accredited funding sources allow us to approach the entire quoting process much differently than a typical Structured Settlement Company. First, we help you gain a better understanding of what you have and the various options available to you. Then we encourage you to seek personal legal advice before selling a structured settlement. Beware of any organization that does not recommend that you seek your own legal advice. A few states require that you are informed that you should seek legal advice, but most do not. Also beware of any company that requires a contract or fee to give you an offer. Again, you should not have to commit to anything to get an offer to buy your annuity payments. Many firms will ask you if you have a quote from someone else and will promise to beat it once they see it in writing. This should also give you cause for pause. Their best price could be the least amount you will accept and not the most they are willing to offer.
You are always better off if you request their best price right up front when selling a structured settlement. Should you choose to attempt to negotiate or play one offer off of another, please do yourself a service and just put the top 2 Structured Settlement Companies into competition. Many firms will call you for months, if not years, after you transfer a portion of your Structured Settlement to someone else. They will know that there are some remaining payments to be sold in the future. Be Warned.
We do not share any of your confidential contact data apart from the particulars of your case. The funders will never know your identity and they will have no way of contacting you in the future. We only forward your information to the highest bidding buyer and only after you have accepted an offer. Of course there is never an obligation to sell any of your structured settlement, annuity payment or lottery annuity.
There is absolutely no obligation and no cost to securing direct bids for your future structured settlement payments. There can be a major expense to accepting a low offer. With some effort, basic education and our assistance, you can be certain that you are getting the absolute best cash offers for structured settlement payments.
“We will generate offers to buy your structured settlement payments and the bids speak for themselves.”
