Subject-to deals let buyers take over a mortgage while the seller keeps the deed in their name. This works for sellers with little equity, those behind on payments facing foreclosure, or anyone needing to sell fast. The buyer handles the mortgage and maintenance while the seller gets monthly cash flow.
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Why would a seller ever agree to subject to? But wait, what even is subject to? Subject to is when the seller sells the house, the mortgage stays in the seller's name, but the deed does transfer over to the buyer. Sounds insane, right? What if I told you it's not? There are a lot of very real reasons why a seller would choose subject to, and I'm about to go over them with you. First, they have no equity. You've probably worked with a seller at some point who didn't have any equity in their home. Either you get lowball offers or you have to tell them they're going to come out of pocket in order to sell their house. Either way, it's not a great situation. Subject To can help solve that problem. Number 2, they're struggling to make payments. Maybe they're even in foreclosure or pre-foreclosure. Can't make payments. If your seller is struggling to make payments, maybe they're even behind, this is where subject to can come in great. The buyer catches up any arrears that may exist and takes over the payments. The seller gets to walk away and wipe their hands of the situation. They don't have to worry about maintenance, the mortgage, or any repairs. And number 3, they're in a hurry to sell. We've had situations like the one that we just closed on recently where the seller needed to move. They needed to be closer to family and they were moving out of state. Unfortunately, that left them stuck with a mortgage. They had tried to list traditionally but didn't get any quick sales. So they had two options: leave it on the market and hope for the best, knowing they're stuck with that payment, or sell to someone like us. Not only were we able to come in and take over the mortgage payment, providing them immediate relief, but we also started making payments on their equity. So they're relieved of the burden of the payments while also getting money in their pocket every month. So if you've ever had one of these situations where you feel like you're stuck, this is where subject-to might be the solution. Comment subject-to for more information.
