Posted by Bill K. (AZ) on May 03, 1999 at 15:23:52:
I disagree with your assessment that a DOS clause means that a buyer’s only option is to pay off the existing loan upon transfer of title.
I am closing on a property Wednesday with a DOS clause that I am taking over “subject to”. I wrote the offer that way, the title company accepted it that way, and the lender has provided documents to the title company that are allowing me to take over the loan “subject to”.
Now, I was prepared to payoff the current lender in case they insisted, but they didn’t. And, they are fully aware that a transfer of title is occurring as I have been in contact with the lender’s representative every 2-3 days to facilitate the closing.
So, be prepared to place new financing on a property with a DOS clause, but it doesn’t hurt to ask or proceed with a offer “subject to”. The lender may decide to waive the clause. It is totally up to them.
Bill K. (AZ)