What is Subject To?

A "subject to" transaction, often referred to in real estate, finance, and investment contexts, is a type of property transfer arrangement in which the buyer acquires ownership of a property "subject to" the existing mortgage or lien on the property. In essence, the buyer takes over the property and its associated financial obligations, such as the mortgage payments, without assuming direct responsibility for the debt. This arrangement can be advantageous for buyers when the existing loan terms are favorable or when they are unable or unwilling to qualify for a new mortgage.

Why Subject to?

Selling your house as a "subject to" transaction can be advantageous under specific circumstances, but it's important to carefully evaluate whether it's the right choice for your situation. Here are some reasons why you might consider selling your house using a "subject to" arrangement:

  1. Avoiding Traditional Closing Costs: When you sell your home traditionally, you may have to cover expenses such as real estate agent commissions, title insurance, and other closing costs. In a "subject to" transaction, you can potentially avoid some of these costs, making it a cost-effective option.

  2. Attracting a Wider Range of Buyers: Offering your property as a "subject to" sale can attract buyers who may not qualify for traditional mortgages due to credit issues or other financial constraints. This can increase your pool of potential buyers and help you sell your property faster.

  3. Maintaining Existing Loan Terms: If your existing mortgage has favorable terms, such as a low interest rate, selling "subject to" allows the buyer to take over those terms. This can make your property more appealing and potentially result in a quicker sale.

  4. Avoiding Foreclosure or Financial Distress: If you're facing financial difficulties and are at risk of foreclosure, a "subject to" sale can help you offload your property, stop the foreclosure process, and protect your credit score.



If you have ANY questions, good to great homes is happy to help answer them and even discuss with your realtor if this would be beneficial for you.