RE Solutions Group, LLC

The buyer takes over the property “subject to” the existing financing. This arrangement allows the buyer to gain control and ownership of the property without having to secure a new loan, making it an attractive option for sellers facing financial difficulties or seeking a quick sale. The buyer now controls the property and takes on all responsibilities of ownership.

In a low equity situation, Subject-To method offers sellers a way to transfer ownership without the burden of additional funds or upfront costs at closing. This can lead to greater financial gain compared to traditional sales, especially considering the seller’s mortgage balance. Also, by relieving the seller of expenses like repairs, maintenance, utilities, taxes, insurance, and HOA fees, the Subject-To transfer allows them to move on from the property and potentially improve their credit score through timely mortgage payments.

The buyer enlists a third-party loan servicing company to handle the monthly mortgage payments. Sellers can choose to receive regular notifications confirming the completion of these payments on a monthly basis.

We prioritize the security of all parties involved by implementing safeguards in our contracts. Our Performance Clause guarantees the seller the right to repossess the property without formal foreclosure in case of buyer default. In such a scenario, the seller stands to gain from all payments made towards the loan, property improvements, and any appreciation in the property’s value.

Our insurance agent will seamlessly replace your current policy with our comprehensive coverage, adding the sellers as additional insured parties. Our company will handle all aspects of property insurance and claims. Additionally, we will efficiently manage the transfer of utility services into our name for a smooth transition.

We recommend sellers plan on keeping their name on the mortgage until the balance is fully paid off. However, based on our experience, the average holding period is approximately 7-10 years.

Since the loan stays in the seller’s name, making timely payments to the lender will be reported to the credit bureau, resulting in a positive impact on the seller’s credit score.

Selling a home on a subject-to basis offers various advantages, including a quicker sale without the need for repairs, renovations, or traditional closing costs. It allows sellers to maintain their existing mortgage, potentially improving their credit score through timely buyer payments. Subject-to sales provide flexibility in negotiations and can be beneficial for distressed sellers seeking a viable option to transfer their property.

Some lenders may have clauses that prohibit transferring the property without paying off the loan, while others may be more lenient. We have dealt with this in the past and have numerous avenues to pursue that gets us around this, legally.