Subject To Real Estate Deals: A Straight Talk for Sellers in 2026

Picture this: You’re selling your house in a market where rates are still hanging high, and someone comes along with an offer that sounds almost too easy. They say, “I’ll buy your home subject to your existing mortgage.” You hand over the keys, get some cash, and walk away, right?

Actually, while it can be a lifeline in a pinch, it usually leaves sellers with more responsibility than they expect. What happens in a “Subject To” deal is that you sign over the deed, so the buyer becomes the legal owner of the house. But the mortgage? That stays in your name. The buyer promises to make monthly payments going forward. Sounds straightforward… until it isn’t.

Subject To works if you’re really in a tough spot, maybe behind on payments or staring down foreclosure. This can get the monthly burden off your plate fast, and you might pocket some cash if your home has built-up equity. The whole thing can close more quickly than a typical sale because there’s no bank payoff or new loan approval to wait for. And if the buyer stays on top of every payment, it could quietly help your credit score improve over time.

The tough reality and why most sellers regret jumping in is that you’re still the one the lender calls if things go wrong. If the buyer skips a payment, pays late, or stops entirely, the late notices, credit damage, and even foreclosure show up on your record - not theirs. Imagine trying to explain that to a future lender when you’re buying your next place.

Then there’s the “due-on-sale” clause most mortgages have. It basically says the bank can demand the full loan balance the moment ownership changes. They don’t always pull the trigger if payments keep flowing, but they can, and when they do, you’re the one on the hook.

You’re also trusting this buyer for potentially 20–30 years. What if they trash the house, run into money trouble, file bankruptcy, or just ghost? Insurance claims, tax issues, or neighbor complaints could still loop back to you if things aren’t buttoned up perfectly.

After the deal closes, you no longer own the house, but the loan remains yours. The buyer handles the payments (ideally directly to the lender), but any slip-up means the bank comes after you for the money, fees, or to start foreclosure. Smart sellers build in ways to watch, like getting lender statements or setting up alerts so surprises don’t blindside them. The only clean exit is if the buyer refinances into their own name or pays off the loan completely.

If you want to buy another home down the road, the old mortgage still counts as your debt on paper, bumping up your debt-to-income ratio and making lenders nervous. You’ll need solid proof of 12+ months of perfect payments from the buyer just to start easing that burden.

The takeaway here is that Subject To deals only make sense in extreme hardship situations and even then, only with a sharp real estate attorney drafting ironclad protections, full disclosures, and a real exit plan. If anyone tells you “It’s safe” or “zero risk” for the seller, that’s your biggest red flag. You give up the house, but you don’t give up the responsibility.