Buying a house ‘subject to’

1 Reply

Who can help me if I want to buy an off-market distressed property ‘subject-to’ the current mortgage? The way I understand it, I would take title but leave the current loan in the seller’s name. This would allow me to get the house for much less upfront than a traditional cash sale. Either way, I’ll want to refi after rehab but this would be cheaper to acquire it. So...can the title company provide a purchase agreement that the seller and I can sign with a subject-to provision? Or do I need to call a lawyer?
Originally posted by @Jason Renfro :
Who can help me if I want to buy an off-market distressed property ‘subject-to’ the current mortgage?

The way I understand it, I would take title but leave the current loan in the seller’s name. This would allow me to get the house for much less upfront than a traditional cash sale. Either way, I’ll want to refi after rehab but this would be cheaper to acquire it.

So...can the title company provide a purchase agreement that the seller and I can sign with a subject-to provision? Or do I need to call a lawyer?

You definitely want to get either a Title company or a lawyer involved who can run a title report to make sure what you are buying and from whom and how much is owed and to whom is as represented. It's a little more sophisticated type of transaction but certainly doable. You are on the right track. Also, some banks require "seasoning" on title before they will refinance a property. The question to ask a lender is how long their seasoning requirements are and what LTV they will lend against and how is that LTV determined. You will need to know that information when you go to refinance but if you don't have that information, you need it now in order to properly plan the project. A lawyer that does real estate investing himself or one that does real estate "creative deals" can put this together for you.

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