Buying Subject To. This is similar to many of the other listed Options and perhaps a Hybrid of several. Involving a motivated Seller(s) that needs to sell but is not able to find a Buyer(s) in a timely manner. The Seller(s) has a property for sale that is of market value
or perhaps lower.
The Buyer(s) will agree to purchase the property assuming that all legal and financial items are legally in order. The Seller(s) will deed over, “quick claim deed”, the property over to the Buyer (the Buyer will now legally own), and the existing mortgage(s) would remain in the Seller(s) name(s).
The Buyer(s) now have the responsibility (legally, morally and ethically) to pay the mortgage(s), taxes, HOA and all other monthly expenses in a timely manner with the understanding that within a preset period of time the Buyer will either payoff the existing loan, gain new financing and or sell to another Buyer and satisfy the existing mortgage.
Many ask about the “due on sale” clause, and the lender(s) do have the right to call the loan, but I have NEVER heard of any lenders ever calling a loan, assuming that all was being paid timely or was given a specific reason to act otherwise.
To the Buyer(s) it is like any conventional deal of home ownership except the Buyer(s) did NOT have to apply or qualify to get a new loan, just assumes the existing Seller(s) mortgage(s).
The new Buy(s) can live there, rent it or sell it. If the Seller(s) is in foreclosure and the back payments are not too high and there is some equity, then the new Buyer(s) can pay the loan(s) current and reinstate, but do NOT do as a short sale. Often times the Seller(s) will actually pay the Buyer(s), no really, it’s true, to do the deal.
The Seller(s) may pay the Buyer(s) 6 months of mortgage payments, taxes and real estate commissions knowing that if the property is unsold for that period of time that have to pay it anyway. Not recommended for the newbies… Then when the market rebounds, then sell it for a tidy profit.
