Subject-To Offers: Why I Warn Sellers

That equity check isn’t what it looks like.

If someone’s offering to buy your house with some cash up front, a partial commission for your agent, and you carrying the rest, read this before you sign anything.

What You Actually Got

If a letter or email showed up offering to buy your property “subject-to,” or with language like “we’ll get you some equity now, cover a partial commission for your agent, and you carry the note,” you’re not the only owner who got it. Investors buy public records lists filtered for vacant, investment, or free-and-clear-looking properties, then send the same offer to everyone on the list. You weren’t picked because of anything special about your house. You were picked because your property matched a filter. Whether you’re already working with me or just trying to figure out what landed in your inbox, here’s the plain-English version.

What “Subject-To” Actually Means

In a subject-to purchase, the buyer takes the deed to your property, but your existing mortgage stays exactly where it is: in your name. They make the payments, but the loan is still legally yours. You no longer control the property, but you’re still the one on the hook if it doesn’t get paid.

Sometimes it comes dressed up as “seller financing,” with a note and a deed of trust that makes it sound like a normal transaction. Don’t let the paperwork fool you. If your existing mortgage isn’t being paid off at closing, and you’re still liable for it while someone else owns and controls the house, that’s a subject-to deal no matter what it’s called.

I don’t recommend this structure under any circumstances. You’d be giving up control of the property while keeping full liability for a loan you no longer have leverage over.

Why I Call This Predatory

These offers are built to look generous. Some cash today. No bank. No inspection headaches. Fast close. What they don’t lead with is who actually carries the risk once the ink is dry, and it isn’t the buyer.

They’re also built to get your agent on board. Some of these offers include a partial commission for the listing agent, even though the deal isn’t a full-price, full-payout sale. That’s worth knowing, because it means an agent recommending one of these to you may be getting paid regardless of whether it’s actually the best outcome for you. I don’t take a fee on a structure like this. If I ever tell you to consider one, it’s because the numbers genuinely work for you, not because there’s something in it for me.

A small amount now. Most of these offers put a small percentage of your equity in your pocket at closing, with the rest tied up in payments over years.
Years of exposure, not a clean exit. You’re not done at closing. You’re now trusting a stranger to keep paying a loan that’s still in your name, for as long as seven years or more in most structures we see.
Their risk becomes your risk. If the buyer stops paying, you don’t get a quick turnaround. Your lender comes after you, not them, and you’re looking at foreclosure on a home you no longer control.
Your credit stays on the hook. Every payment history on that loan still reports to you, for better or worse, for as long as it’s outstanding.
A due-on-sale clause hanging over the entire deal. Most mortgages let the lender call the full balance due the moment ownership changes hands. Lenders don’t always act on it, but it’s a real risk sitting over you the whole time your name is still on that loan.
This isn’t a structure with an upside for you. It’s a way for an investor to control your property and your equity without ever qualifying for a loan of their own.

Should You Even Respond?

That’s always your call, not mine. But here’s what experience has taught me. If you’re not interested, even a polite “no thank you” tends to open the door to a long back-and-forth. These offers are written to be negotiated, and once you engage, you’ll often get a revised structure, a phone call request, or a follow-up trying to talk you into it. That’s time spent with no upside if you were never going to do a deal like this in the first place. My general recommendation: file it away and don’t respond. Silence isn’t rude here. It’s just not worth the hours it can turn into.

Before You Do Anything

Get your mortgage payoff confirmed, if there is one. Talk to your own real estate attorney; these documents are drafted by the buyer’s side, not yours. And call me before you respond to anyone who sends you one of these. I’ll walk you through exactly what’s being asked of you and what a traditional sale gets you instead.

Got one of these offers? Let’s look at it together.

No pressure, no sales pitch. Just a straight answer on what it means and what it’s actually worth.

Call or Text Steve