Subject to" and/or lease-options are great ways to sell your house FAST! Your house MUST BE in good shape AND have equity!
"Subject to" Purchase: Simply put, this is where I buy your house and take over your payments completely, but I don't assume your loan. In other words, the title (deed) transfers from you to me, BUT the loan remains in your name and attached to the house. "Now why would I even consider doing something like that?" If you can't afford to make your payments anymore, or you don't have any equity in your house, or you owe more than what the house will appraise for, then what are your choices? List with a real estate agent? Short Sale? Foreclosure? Bankruptcy? Try selling to a retail buyer in a slow real estate market? All of these choices are risky at best, without solving the basic problem of how to make your monthly payments. "Subject to" allows your to walk away from the house and leave the debt in my hands. Yes, there are risks involved with this type of transaction (your lender may call the loan due since title has transfered); but would you rather wait around until someone else makes you a full price offer? Since its very likely that you won't be able to sell you house to a retail buyer quickly, then you're risking your house and personal credit anyway by waiting around for someone to rescue you. It comes down to a simple choice: Do you want to turn your house over to someone who can make your monthly payments for you, or do you want to continue making your payments yourself?
Lease-option: This is where I lease your house from you, with the option to purchase your house for a preset price, within a predetermined time period. Also, I have the right to sub-lease your house to someone else who will actually be living in your house. I will make a monthly payment to you, which you MUST use to pay your monthly payment to your lender. At any time within the lease period (2 year minimum), I have the right to buy the house from you, for the price we agreed to when we signed the lease-option agreement. If I don't buy the house by the end of the lease term, then you will get the house back (with 2 year's worth of equity courtesy of me) and you can do whatever you like with it. I will guarantee my payment to you AND the maintenance of the property while I'm leasing it from you. If I fail to live up to my obligations to you, then you have the right to cancel the agreement and evict me and the tenant from the house. In order for me to consider a lease-option, you must have some equity in your house, and the most that I will guarantee to pay you is whatever the current market rent is in your area. Anything over that amount will be your responsibility to pay. But, would you rather pay all of your monthly payment, or a small piece of it?
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