Have you sold a property "Subject-To"? - HELP!

Member since 2019 · 9 posts · 8 votes

Hi All,

I moved from California to Atlanta this summer, and my LA townhome hasn't sold. It's eating into my cash flow and I need to sell asap. I have a subject-to offer, but I'm unfamiliar with subject-to's and the due on sale clause issue sounds very risky. I would love to connect with anyone who has sold subject-to to better understand the transaction and the risk.

And if anyone knows an attorney with experience in Subject-to in California, a referral would be much appreciated!

thank you!!

Elias

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Kevin Carpenter
Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes
10mo
What ' subject to ' are they stipulating specifically ?
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
10mo
if you are to do this, I would still hire a third-party to underwrite them to confirm their ability to repay this loan so you do not get stuck later on down the line with still having your name on the mortgage, but not on the deed
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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
10mo
Quote from @Elias Parisca:

Hi All,

I moved from California to Atlanta this summer, and my LA townhome hasn't sold. It's eating into my cash flow and I need to sell asap. I have a subject-to offer, but I'm unfamiliar with subject-to's and the due on sale clause issue sounds very risky. I would love to connect with anyone who has sold subject-to to better understand the transaction and the risk.

And if anyone knows an attorney with experience in Subject-to in California, a referral would be much appreciated!

thank you!!

Elias

There are at least two serious issues with selling Subject To.
1. If they stop making the payment, you get foreclosed on, not them. It's your credit that gets ruined, not theirs.
2. If they stop paying, you can't just evict them, you have to foreclose. Yes, it does get a little complicated.

As an aside, as long as the mortgage gets paid, it's unlikely the Due on Sale will get called.
So, your solution would be to make the payments on a house you no longer own. If you are prepared and trained on all of that, sure take their offer but get 10% down (or however much you can) up front. It shows they are serious and you have the money to make the payments while you are foreclosing on them.
Instead do a Lease/Option or Wrap (call All Inclusive Deed in CA. I believe).

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