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Updated over 5 years ago on . Most recent reply
Sub2 Contract Addendum
My partner and I are new real estate investing and this site has been invaluable to tackling our 'vertical line' learning curve, so thanks to all of you! I'm looking for help on 2 things: figuring out the best verbiage for a contract addendum for sub2 transactions and finding a few investor friendly title companies spread out around DFW. Any help with either would be greatly appreciated!
Most Popular Reply
I know this is a dated thread, but its important to NOT use the TREC promulgated Loan Assumption Addendum when trying to purchase a property subject to an existing mortgage. This addendum is ONLY for use when ASSUMING a loan. ASSUMING a loan means that the buyer is accepting all obligations for the note. When buying a property SUBJECT TO an existing mortgage, the buyer is not assuming responsibility for payment of the note - that responsibility still lies with the initial mortgagor/original borrower. That's actually the main benefit of "sub-2" deals, and you'll complete negate that if you do an assumption.
Neither TREC or TAR have sub2 forms, so make sure you contact a real estate attorney to have them draft one for you. I wouldn't recommend using a form you find on the internet....