Can you purchase a home without money, credit, or without having to take out a new loan or sign for debt? The answer may surprise you. Yes. Yes, indeed.
The way to do it is to purchase “subject-to,” a term meaning taking ownership to houses without signing for debt or taking out a new loan. Subject-to is a buying strategy where you are taking ownership of the home, while keeping the seller’s existing financing in place until a new buyer obtains new financing and title is transferred.
This is not a “get rich quick” scheme. It’s a sound and proven technique for earning wealth through the acquisition of property. There’s a lot of work involved and you have to invest enough time to make the process work.
Five Steps to Buying Houses Subject-To
STEP ONE
Attracting Motivated Sellers
A motivated seller needs to sell that property — that’s a significant difference from someone who merely wants to sell. You’re in a much stronger bargaining position when dealing with people who need to sell. The best sources include sellers in pre-foreclosure, sellers who own vacant houses, and sellers who have an expired listing.
STEP TWO
Pre-Screening Sellers
Pre-screening sellers is a method of separating sellers that want to sell from the sellers that need to sell. Drive all your prospects through a free 24-hour recorded system that automatically does the pre-screening for you. Use a seller’s website to position yourself as an expert.
STEP THREE
The Face-to-Face Meeting
The purpose of a face-to-face meeting is to establish trust and credibility with the seller. Prepare a presentation binder to build trust and credibility at your meeting. Include references, flyers of properties purchased, and samples of how you build a buyers list.
STEP FOUR
Due Diligence
Contact the seller’s lender using an Authorization to Release Information Form. Confirm your comps to make sure that you are dealing on real world facts and figures. Drive the neighborhood and pick up any House for Sale flyers you find. Devise your exit strategy.
STEP FIVE
Closing
Complete the purchase and sale agreement form and have it signed by the seller. Set a firm date for closing on the property. Most sellers can be closed in five to seven business days. Contact your closing attorney or title company.