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Updated over 14 years ago on . Most recent reply

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What is "Subject to..." ?

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Posted

OK, can someone out there explain what is meant when someone acquires a property " subject to..." ? Subject to WHAT ?
I believe this means subject to existing financing, but I'm not sure. If so, how do you avoid the Due on Sale Clause? Or is this done with the approval of the mortgage company? What is the exit strategy for such a purchase/acquisition?

If you can explain in bullet format (A,B,C,...1,2,3,..) I sure would appreciate it. Thanks in advance.

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Randall Mixon
  • Real Estate Consultant
  • Columbus, GA
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Randall Mixon
  • Real Estate Consultant
  • Columbus, GA
Replied

Harbinger is correct; however, EddieBoy is asking about something else entirely. If I find a Seller so inclined, I can get the Deed (usually in a "kitchen table closing"), and I now own the house "subject-to" the existing financing. The loan stays in the original borrower's name. The lender only wants the payment, so the Due On Sale Clause is a moot issue.

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