Wholesaling houses with mortgages.

[Gary Hazard]

My last question of the day. If a house has a mortgage on it regardless if its paid or unpaid, how do I negotiate a deal? I dont understand what happens to the mortgage. Who pays the mortgage? Does it get paid? Can someone please give me a scenario of how to deal with a house that has a mortgage, paid and unpaid? Please help me out with this mind boggling question. Thank you.

[Stinson Bland]

I will have to respectfully disagree with Manny. Many motivated sellers have a mortgage. Life problems (job loss, back taxes, etc.) and the pressure of making the mortgage payment is often what is driving their motivation. Free and clear owners do not have the stress related to monthly mortgage payments and they're typically less motivated to sell at a steep discount.

To answer your question:

The mortgage must be paid in full at the closing.

Your offer price must cover the mortgage or your seller will need to cover the difference between your offer and the mortgage. If your offer covers the mortgage, your title office will use your end buyers funds to payoff the mortgage. It's that simple.

Please don't discount the chances of a home owner bringing cash to the table. If they can afford it and they're motivated enough (divorced, moving, inherited); they will do nearly anything to get out of the house.

Good luck!