Posted by B.L.Renfrow on October 31, 2000 at 08:38:53:
You may want to think twice before you add that clause.
When I buy subject-to, I typically will go ahead and sign the P & S early-on. I will then perform the usual due-diligence stuff. More than once I have found undisclosed liens, second mortgages, etc which the seller “forgot” to mention. I have also had to terminate a deal because of it. The last thing I would have wanted was the seller trying to force me to go ahead and pay their arrears.
I make it clear to the seller that the deal is not “done” until I record the deed into the trust. And you can be sure I’m not paying a penny of the arrears until I know the state of that title. So you can see why it might not be a great idea to be obligated to make up the back payments before you’ve had the chance to investigate fully.
What I tell the seller is that I WILL make the back payments AFTER I (and sometimes my attorney also) have checked out everything to my satisfaction AND have determined that everything is in order.