Subject To

A subject to is an option that an investor might offer you when inquiring to buy your home.   It means that they want to buy your home “subject to” the existing financing.  Which put simply, means they want to take over your current mortgage payments and possibly any other liens that may encumber the home.

Investors who opt to offer you this option will likely also cover all other costs involved in the transaction and may typically be buying it to fix up and sell again.

The reason this strategy is a good option for both buyer and seller is because an investor has the resources to fix up properties and find buyers, but they can’t always get a conventional loan with a bank because of current guidelines.   This means, having the loan stay in place is an essential part of the deal working for both parties.

Subject to transactions have an added benefit to the seller because they are relying on a investor to make the payments on the property instead of a typical buyer which may give the seller a higher comfort level.

Some of the advantages of a subject to transaction are…

  • Little to no closing costs
  • Almost always, no realtor commissions
  • Can improve the sellers credit
  • Faster home sale
  • Higher Comfort Level

The main disadvantage to a subject to transaction is…

  • If the investor stops making payments, the seller will get the house back by either a foreclosure or a deed-in-lieu.

We may be interested in buying your home using this method or perhaps helping you broker the deal to another investor.