Subject To financing question

[Rosston Smith]

I'm looking for clarification on Subject to. When subject to financing is used, is the equity the seller has put into the property forfeit? Meaning, is the seller paid for the equity they have put in the property so far?

For example"

The mortgage on the home is $100,000.
The seller has paid $20,000 of it down.
The remaining mortgage value is $80,000.
I assume the $80,000 mortgage.

Does the seller lose the $20,000? What would entice them to give that up? 

[Steve Vaughan]

Originally posted by @Rosston Smith:

When subject to financing is used, is the equity the seller has put into the property forfeit? 
For example the mortgage on the home is $100,000.
The seller has paid $20,000 of it down. 
Does the seller lose the $20,000? What would entice them to give that up? 

Usually the bigger equity is in the appreciation of the home's value over time  but the answer is it really depends on what you and the seller work out.  

The old model is to give the seller moving money for the deed.   

If the equity is larger (because of appreciation and /or principal pay-down) additional buyer funds and / or a seller wrap-around mortgage (wrap) can be written.  

What entices them to give up net equity is the problem of owning the house going forward is greater than the need to maximize their proceeds. Death, divorce, disinterest are common.