Buying Your Home “Subject-To”

Strange as it may seem to you, there are homeowners who will actually give you their home for nothing if you will just take over their mortgage.

Why on earth would they do this? Well, there are various reasons.

Some may be behind in payments.? If so, you will have to catch these up with the bank. If you’re short of cash and they’re behind more than a couple of months you can always pass the deal up and look for another home.

Keep in mind that it is you who are in the drivers’ seat. You are deciding whether or not you really want to go through with a deal. Isn’t it great? No banker telling you “No.” You’re the one doing the telling!

Often, the Seller is not behind at all! But they soon will be. Or maybe they bought a second home before they sold their original home and are making payments on two houses.

Your job is going to be finding someone with a problem and solving it for him or her. And you’ll do it they same way many investors do. Scanning the real estate wanted ads in your paper. I’m sure you’ve seen many ads that say ‘We Buy Houses’ or ‘Fast Cash for Your House’.

Investors run these ads all of the time because they work! Most of these ads don’t produce a lot of homes - but you’re not looking for a lot of homes, you’re looking for One Home. Your American Dream Home. You don’t care if you only find one home and not 5 or 10. At least not now - you may later when you find out this works!

You have a HUGE advantage over the investors who are advertising. As a rule of thumb, an investor will only pay 70% of the market value for a home. For them, it’s reasonable and necessary to buy at a wholesale price in order to make a profit when they resell the home. You don’t have to try to negotiate the absolute lowest price acceptable to the owner. You’re not looking for a profit - you’re looking for a home!

Here are a couple of ads that can help you sniff out motivated sellers:

Making payments on a
house that won’t sell?
We will buy your house
in 24 hours! 555-5555

Escape Foreclosure!
No equity OK. Fast
closing. 555-5555?

You can also look in the paper for homes that say ‘For sale by owner’, ‘Owner Contract’ or ‘Offer’. Sellers that advertise like this, or place a ‘For Sale By Owner’ sign in their front lawn, are good prospects for you to talk to. Of course, not all of them will be willing to let you take over their mortgage - but some will. You only need one!

Some of these owners just don’t have enough equity in their property to pay sales commissions and closing costs, etc., so they are trying to “do-it-themselves” and save every penny they can.

Some of the owners just want out! They are in the hole now and they don’t want to dig it any deeper! Investors actually obtain houses sometimes where the owner pays them to take over the mortgage!

When you find a motivated Seller you will meet with them. If you like the house and want to proceed, it’s time to put on your Negotiating Hat!

Start by asking ‘Would it be helpful if I just started making your payments for you?’ They may say no, but they may also ask what you mean. Then you can explain that you would take over their payments and pay them a small fee, say? $100.00 - $500.00, for their trouble in completing the paperwork and getting the deed notarized.

Now and then you will be fortunate enough to find a seller who will accept your offer. Not often. But if they have little or no equity, they might jump at the offer! Isn’t it worth asking? Investors do it all the time! After all, it would save the seller a real estate sales’ commission and you will pick up all of the closing costs. Actually, there will be very little in the way of costs because you will close the deal right there on the kitchen table!

But let’s assume they say no. Okay, that’s when you really start to find out how much they want for their equity, when you can take possession and if they are willing to let you take over their mortgage payments for them.

If you can’t reach a deal, it’s on to the next one. You may have to talk to a few people, but then you were talking to bunches of people before, trying to buy a home the traditional way. And it didn’t work.

Believe me this does work! Just stick with it.

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