Subject to... protection for Seller - Posted by T jent

Posted by Russ Sims on February 20, 2001 at 11:34:32:

Hey Brian!
I haven’t had to do it yet, but certainly would if it would make or break a deal. You’re right: most sellers don’t give a darn due to extreme motivation.

Subject to… protection for Seller - Posted by T jent

Posted by T jent on February 19, 2001 at 22:46:29:

There is something I don’t understand about subject to deals. What legal remedies does Seller have when Buyer defaults? If I sell to Buyer. He takes title and agrees to make mortgage payments. Suppose he defaults. The bank has recourse against me. Now, I can start making the payments myself to avoid bank action, but meanwhile Buyer stays in the house. He owns it. I can’t foreclose on Buyer because I am not a mortgage holder. How do I get him out… especially when the lender who does hold the mortgage probably does not allow subject to transfers anyway so this was done behind its back.

Re: Subject to… protection for Seller - Posted by Bud Branstetter

Posted by Bud Branstetter on February 20, 2001 at 10:00:45:

Your comments are justified. There are inherent problems with doing subject to, contract for deed, or L/O. Some of these problems can be alleviated with 3rd party collection, performance mortgages, etc. But there still remain problems. You don’t let those problems from detering you to invest. Some sellers do balk because of the investors inexperience or approach to solutions.

Personally, because of the inherent problems I switched to using the PACtrust approach for doing the equivalent of the subject to deals.

Re: Subject to… protection for Seller - Posted by Russ Sims

Posted by Russ Sims on February 20, 2001 at 02:14:41:

If seller is smart seller has buyer sign a quit claim deed that is placed with escrow. Escrow instructions say that if buyer defaults on loan payments, escrow executes the deed on behalf of seller. Buyer loses property. As far as how to get buyer out, not too sure. Call the Sherrif? Best talk with an attorney…

If you are working with a seller who has a hard time with the ‘subject to’ scenario, suggest Land Contract. Explain that since they have the deed, they are more secure. If seller still balks, suggest lease/option.

Re: Subject to… protection for Seller - Posted by Dion S

Posted by Dion S on February 19, 2001 at 23:38:17:

You will be selling to your buyer on a “Contract For Deed” and even if you did sell “Subject To” you would be getting a nice down payment from your buyer and then it’s all up to him!. You got your money out of it up front. If he defaults he loses the house, your covered, because you will have had him sign those documents CYA Letter etc.

The original seller who sold to you subject to was in deep doo doo when you took it over and was not concerned about his credit from ground zero so he’s the guy in trouble not you!

I don’t even know why I tried to explain that!

Sell on a CFD and buy Subject To

Dion S

Re: Subject to… protection for Seller - Posted by B.L.Renfrow

Posted by B.L.Renfrow on February 20, 2001 at 08:53:22:


Just curious whether you do this yourself…sign a quit-claim deed to be held in escrow when you take a property subject-to?

I do not, although I’ve considered doing so in the past if it were the only way to close a deal. But all my subject-to sellers thus far are so glad to be rid of their problem they don’t ask and don’t really care.

Brian (NY)