William Tingle – What Exactly is a "Subject To" Transaction in Real Estate?

There are a lot of different types of real estate transactions some of them good

, some of them bad. Some of the might be good for one party and some might be good for both parties. Or a transaction could end up being bad for both parties!

You get the point. One specific example of a real estate transaction is what's known as a "Subject To" deal. In a Subject To deal, you're typically talking about an investor (the buyer) and a homeowner (the seller) who are both looking for something quick. In the investor's case, a quick "takeover" of a house and its payments is in order. In the homeowner's case, a quick way to get out of mortgage payments might work out just fine.

A Subject To deal is one in which the buyer agrees to take up the mortgage payments of the home in exchange for a far lower up-front fee. The house ownership is transferred, and the seller might not get a great deal in terms of a flat fee, but not having to pay those mortgage payments anymore can be a real breath of fresh air.

As you can probably figure out on your own, the Subject To transaction cuts out the middle man. Real estate agents and loan officers don't really have a big impact on this kind of decision it's essentially an old-fashioned trade between two parties. As long as the contracts are drawn up properly and everything is squared away with the paperwork, these transactions can be great deals not only for the buyer, but for the seller as well.

What does this mean for you if you want to get into real estate?

Well, for one, it's another tool to consider when you're thinking about what you might be able to do with potential real estate acquisitions in your future but that's if you're already in real estate. If you're looking to get into real estate, it's a great way to simply open up your mind to the different types of possible ways you can get great deals on homes without putting a lot of upfront money into every deal that comes your way.

Of course, the downside to a Subject To agreement is that you'll have to take over the long-term payments, but for a creative, outside-the-box real estate investor, this isn't necessarily a problem. If you view these expenses simply as another variable to consider in your real estate ventures, you can really get the math to work in your favor.

William Tingle

http://www.WilliamTingle.com

(c) Copyright 2010, All Rights Reserved.

William Tingle What Exactly is a "Subject To" Transaction in Real Estate?

By: William Tingle

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