"Subject to" questions - Posted by Martyv

Posted by chan on October 08, 2003 at 12:29:47:

You just add an addendum to your contract that
says something like:

“I _____ the seller aware that there is a due on sale
clause on my mortgage/note and that this transaction
(subject to) may cause the loan to be called due. I
will not hold the Buyer responsible for it if that happens…”

Please DON’T quote me…I’m not an attorney…just
somebody who wants to help other fellow investor

“Subject to” questions - Posted by Martyv

Posted by Martyv on October 04, 2003 at 05:56:00:

I make my living as a real estate agent just collecting the commissions by helping other people get good deals.

Finally am looking into investing in property on my own and am changing the way I look at “subject to” purchases. These are called “illegal wraps” in my area.

I can see that “subject to” purchases would open up a lot of good possibilities for investments but have a few questions.

  1. Doesn’t the seller still retain liability for the loan on a “subject to” purchase?
  2. If the “due on sale clause” is triggered, wouldn’t the ultimate responsibility on paying the accelerated loan lie with the seller?

If the answer to the above two questions is “yes”, I would need to disclose that to the seller. Does anyone have a good clause for that disclosure?

Re: “Subject to” questions - Posted by William Bronchick

Posted by William Bronchick on October 04, 2003 at 10:16:24:

Listen to the audio description of this under “Articles.”

Read my article about the due on sale under “Articles”

Re: “Subject to” questions - Posted by Martyv

Posted by Martyv on October 05, 2003 at 03:25:45:

I had read your article on due on sale clauses. That was my initial education…or “re-education”. I have since re-read it and you do quote the Utah reg requiring agents to disclose the ramifications to the seller. I haven’t listened to your audio article and I promise to do that.

Perhaps in that arcticle you talk about how to educate the seller on this without scaring him off??

I see that you have some videos and courses. Would the course on Land Trusts be the appropriate one for this question?