Properly Protected “Subject to” deal

[Dave Barker]

Hello, I’m an investor from Wisconsin. I purchased a home via “Subject to”, I’m listed as additionally loss payee insured on sellers policy & of coarse I own the Deed. The mortgage is still in sellers name until some time in the future. 1)How do I or how am I properly protected if my Seller dies? I’d rather not have to fight with Probate, family members and or any other unforeseen issues? 2) is there a better way to insure myself, rather then be listed as additional loss payee? I appreciate your time & thoughts.:)

[Jeremy Pace]

@Dave Barker as an additional loss payee, you're eligible for payouts from the homeowners insurance policy of the previous owner, which doesn't really make that much sense.  If the deed has been transferred to you, why does the seller still have a homeowner's policy on the home?

It sounds a little bit like you might be conflating "Subject To" with a land contract ... which is where you and the seller sign a contract in which you agree to take some forms of title, while the seller keep the deed, liens, and insurance in place until the conditions of the contract are complete.

In either case, the two cases you need to be worried about are:

1) The bank calls the mortgage note because they realize that you transferred the deed, which is within their right, as per their contract with the previous owner.

2) The seller dies, having told not one other person that the two of you are participating in a land contract, and you have to provide the contract and proof of it's authenticity to the probate court/judge/lawyer/whoever to make sure that your contract is enforced.  Note that this scenario may also include the bank being notified that the previous owner died and calling the mortgage due because they want their money.

Please feel free to provide additional details, for clarity.