What is subject to ?

"Subject To" is a way of purchasing real estate where the buyer takes title to the property, but the existing loan stays in the name of the seller. In other words, "Subject to" the existing loan. The buyer now makes the mortgage payments on the seller's existing mortgage to the seller's lender.

Benefits for the seller:

Get More Cash At Closing - Sellers can walk away with even more, $ in their pocket than a traditional sale. With Subject-To, we can sometimes pay even more since we are buying based on the cash flow the property produces as a rental and not based on the property's retail value.
Seller’s credit - Improves with on-time payments to the mortgage.
The seller can move on from the property - The seller no longer owns the property and therefore is no longer responsible for expenses such as repairs, maintenance, utilities, taxes, insurance, HOA, etc

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Frequently Asked Questions:

Who is responsible if there are repairs or maintenance needed on the property?

The seller would not be responsible for any repairs or maintenance on the property after the deed is transferred. The person responsible for any repairs or maintenance would be whoever is on the deed of the property. Since the seller’s name would only remain on the mortgage and the deed would change into the buyer's name, the buyer would be responsible for all of the repairs and maintenance

What if seller wants to buy a property right after selling theirs ?

In the event the seller needs to purchase a property within a year of selling their other property, our company can help them buy a house subject to the existing mortgage, the same way we bought theirs. Doing this would allow them to purchase a home with a low downpayment and taking advantage of relatively low monthly payments.

The seller can also buy a new home traditionally by showing their lender that their mortgage has been paid on time for 12 months by the buyer.

What happens if we miss a payment ?

At closing the title company or closing attorney will create a Deed In Lieu which states that if the buyer misses a payment for 30 days the Deed will be transferred back to the seller.

Recent Properties Acquired Subject To:

202 Crest Cir S, Jasper, AL

Sold on 04/26/24

The seller ended up walking away with $12,000 after only having the property for 2.5 years. Agent also received $11,500 and closing costs were paid by buyer.

6810 Eastwood St, HoustonTX

Sold on 4/10/24

Seller net at closing was $7,000 after only having the property for a year and a half. Agent received $4,500 at closing and closing costs were also paid by buyer.