Definition
Subject-To Sale
Also called: subject to existing financing, sub2
A subject-to sale transfers a home's title to a buyer while the seller's existing mortgage stays in place and in the seller's name — the buyer makes the payments but never formally assumes the loan. The seller remains legally liable if the buyer stops paying.
Subject-to deals are pitched hard to distressed sellers because they need no new financing and can close fast. The risks concentrate on the seller: the loan stays on their credit, most mortgages carry a due-on-sale clause the lender could invoke, and a buyer who collects rent then defaults leaves the seller facing the foreclosure.
There are honest subject-to buyers and real cases where it fits, but the structure demands more legal review than any other exit — an attorney's hour before signing, not after. A conventional cash sale that simply pays the loan off avoids the tail risk entirely.
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