Salmon Creek Law Offices

“Subject to” sales, Real Estate Law, Vancouver, Washington

Denise Lukins, Attorney, Salmon Creek Law Offices, 360 576-5322

Lately, I have been contacted by a number of people who have been approached by companies offering to buy their distressed homes.  Often, but not always, these people are either seriously delinquent, or actually being foreclosed upon.  However, in most cases, the offer is “subject to” the existing mortgage.  In other words, instead of paying off the mortgage and other liens at closing, these items remain and the buyer “promises” to pay them.  Of course, the distressed homeowner remains the responsible party under the mortgage.  Nonetheless, because the distressed homeowner hopes to avoid a foreclosure on their record and sometimes will receive a small amount of cash, this seems like a good offer to them.  However, I have warned many people that they could vacate their home, and still have a foreclosure or judgment on their records if the company does not do as they promise.  In addition, such an arrangement usually violates the “due on sale” portion of the underlying mortgage.  In fact, these transactions are so risky that title companies handling the closing insist that the sellers get a letter from an attorney “approving” the sale.  Beware of any such offer, and remember, if it sounds too good to be true, it probably is.