What It Means to Buy Property “Subject To” And What Are the Advantages

In Real Estate, the term “subject to” could be applied to many different contingencies when making an offer on a property. “Subject to inspection”, “subject to approval” or subject to whatever the buyer may need or want while the seller has to accept to make the transaction happen. The subject to we’re going to discuss is “subject to the existing mortgage” In short, after the closing has taken place and title has transferred from the seller to the buyer, the existing mortgage will remain in place.

Subject to the existing mortgage (subject to) is the most common “subject to” in real estate investor circles. So common, that when you say “subject to” to an Investor, unless you’ve specified something else, he assumes you’re referring to using the existing financing on the property.

What are advantages to both buyer and seller?

  • Buyer – This Is a No Qualifying Loan
  • Buyer – No Loan Expenses
  • Buyer – No Limitations on The Number of Loans or Amount Of Loans You Can Have
  • Seller – Ability to Sell Damaged Property in Need of Repair
  • Seller – Damaged Payment History Can Be Repaired and Your FICO Score Raised
  • Seller – Ability to Sell Low or No Equity Properties that otherwise would not sell
  • Buyer and Seller – Speedy Transaction Closings


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