subject to financing

[Daryl Hill]

I have a situation where I have a person who just wants to get out of their home and I can take over the payments, how do I start this process and what paperwork do I use?

[Darrell Shepherd]

You dont need to do a wrap mortgage, just 'get the deed' as Ron Legrand would say. Its gonna vary by state, but basically you just get him to deed it to you, get a power of attorney to deal with the mortgage company and start making his payments. I haven't done one in a while because everything I've bought lately has been from banks, so there may be some new stuff, but I've done well over a hundred of these over the years here in Georgia. I hardly ever pay off a loan that's in place when I buy something from an individual.

The due on sale clause does not make it illegal, just means the bank can call the loan due if they want. I've never actually heard of this happening when the loan was current, but it could. If that's gonna keep you up at night, you could structure it as a lease option, but you have WAY more control taking it sub2. Doing a wrap makes you pay the seller who then pays the bank. You can just own it and pay the bank directly by having them deed it to you 'subject to' the existing mortgage.

I usually closed them at the attorney's office, but just for credibility, you can do it yourself if you want. Transferring real estate is amazingly simple when there's no mortgage company involved.

Make sure you can still get in touch with the seller, though. I had some problems getting payoffs and such when my POA was 3+ years old even though I owned the house.

My advice is to find someone local that's done a few in your state to walk you through it. The closing attorney may or may not know how.