Subject-to Real Estate Contract

A subject-to contract is a real estate agreement in which a buyer takes ownership of a property while the existing mortgage remains in the seller’s name. The buyer agrees to make the mortgage payments on behalf of the seller but does not formally assume the loan. Key aspects of a subject-to contract include:

• Ownership Transfer: The buyer gains legal ownership of the property.

• Existing Loan: The seller’s mortgage remains active, and the buyer takes responsibility for payments.

• Flexibility: Often used in creative financing, allowing buyers to acquire property without securing new financing.

• Risks: If the buyer fails to make payments, the seller remains liable for the loan.

This method can benefit both parties by simplifying the transaction and reducing upfront costs.