Hello, if I purchase a subject-to property from someone, cure the default on the mortgage, and keep making payments to hold the property long-term, for what reasons may the original seller need to come back to the table to sign off on documents 1,2,5 years do the road?
I'm concerned that the original seller may be hard to find, and/or not interested to come back and sign off 'down the road.'
What steps can I take to deal with that problem/make it a non-issue NOW?
Good question, Mark. With a properly structured subject-to, you generally shouldn’t need the seller to come back later if everything is signed upfront. The big risk is when paperwork isn’t buttoned up at closing. A few ways I’ve seen people protect themselves:
Get a limited power of attorney from the seller at closing so you can sign anything related to the mortgage if something pops up.
Make sure the deed is fully transferred and recorded right away so you control title.
Use a performance deed / land trust / escrowed docs depending on your state, so you’re not chasing signatures years later.
I’m in Utah and we see a few subject-to deals here, and the investors who run into problems are almost always the ones who skipped one of those steps. Curious what others are doing in their markets to keep it clean?
Good question, Mark. With a properly structured subject-to, you generally shouldn’t need the seller to come back later if everything is signed upfront. The big risk is when paperwork isn’t buttoned up at closing. A few ways I’ve seen people protect themselves:
Get a limited power of attorney from the seller at closing so you can sign anything related to the mortgage if something pops up.
Make sure the deed is fully transferred and recorded right away so you control title.
Use a performance deed / land trust / escrowed docs depending on your state, so you’re not chasing signatures years later.
I’m in Utah and we see a few subject-to deals here, and the investors who run into problems are almost always the ones who skipped one of those steps. Curious what others are doing in their markets to keep it clean?