Is buying “subject to” pretty straightforward?

Question

Charles Renn · Answer

Hi @Jen Taylor,

Great question, and one that often intimidates buyers at first, but is an often used tool for sellers to confirm how serious buyers are when the subject property is tenant occupied. As you might imagine, sellers may not want to bother the tenants with window shoppers interested in a showing. While it's always recommended to seek an attorney in legal matters, writing an offer subject to inspection is a regular task for an experienced investor friendly agent, at least on my team. Hope this helps!

Eliott Elias · Answer

I would have an attorney guide you through the process. There are some specific way to maneuver that will get you out of trouble. I would use a attorney owned title company

Account Closed · Answer

Absolutely it's pretty straight forward, when all goes well. A  monkey can learn to do them.

So, what happens when it doesn't go well? Most of the time it's easy to solve the problem and recover and move on. But, occasionally, the thing backfires and the monkey who put it together runs back into the jungle never to be seen again and you are left holding the bag and have to deal with the mess.

What is your tolerance for the lender calling the loan due, an irate seller who comes back at you a couple of years after you buy (saying you cheated them or tricked them), being sued by various people and entities, an economy downturn and you stop making the payments, and so on?

It's helpful to know the contingencies, what can go wrong and how to plan for them . . .  in advance. Markets change  over time and if interest rates go up high enough, banks will be looking for Subject To deals to call in. They will want to  get the low interest rates off their books and lend that money out at higher interest rates. (Due on sale clause)

There are great rewards doing Subject To, when done correctly & legally. Experience, experience, experience. Work with someone who really, really, really knows what they are doing and you should be fine, if you follow the "rules".

Charles Renn · Answer

Good call. Thank you Jay!

Robert Reynolds · Answer

I agree with Charles. Speak with an investor friendly agent and let them run you through several scenarios. However if you already have a property in mind, talk with an attorney and they can help guide you on that. I don't know you particular circumstance, but I definitely understand the benefits of subject to, but there are some down sides you may want to be wary of.

Jay Hinrichs · Answer

I dont think that was the OP question..  it was not making an offer sub too inspections..  sub too in this context is buying sub too the existing mortgage ..

Jay Hinrichs · Answer

yes pretty simple concept..  although best used by those with plenty of cash to operate the model.

Is buying “subject to” pretty straightforward?

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