What Is “Subject To” in Real Estate?

A “subject to” real estate transaction allows a buyer to take ownership of a property while the seller’s existing mortgage remains in place. The buyer makes payments on the seller’s loan but doesn’t formally assume it—often taking advantage of the seller’s low interest rate and loan terms.

✅ How “Subject To” Works

  • The seller keeps the mortgage: the existing loan stays in the seller’s name.
  • The buyer takes possession: they make monthly payments directly to the lender or through an escrow service.
  • Title transfers to the buyer: even though the loan remains active, the deed is recorded in the buyer’s name.

This method helps buyers acquire homes without qualifying for a new loan, though sellers remain responsible for the mortgage until it’s paid off or refinanced.

💡 Why “Subject To” Can Be Useful

“Subject to” financing is popular among investors and creative buyers because it offers flexibility and potential savings. It can also help sellers who need to offload a property quickly without a traditional sale.

  • Use the seller’s existing low-rate mortgage
  • Close quickly without bank approval
  • Provide relief for distressed or behind-on-payment sellers

📍 What FSBO Sellers Should Know

If you’re selling For Sale By Owner (FSBO), a buyer might propose a “subject to” deal. While these arrangements can help close quickly, it’s essential to:

  • Consult a real estate attorney or title company before signing
  • Ensure payment terms are clear and legally documented
  • Understand that your loan remains in your name until it’s paid or refinanced

Handled correctly, “subject to” deals can be win-win—but transparency and legal oversight are key.