When Selling Subject-To Makes Sense
You owe close to what the house is worth, so a traditional sale with commissions and closing costs leaves you writing a check. You need out in weeks rather than months. You're relocating, going through a divorce, or carrying a payment on a house you no longer live in. Or you're behind and a foreclosure timeline is running.
It's the wrong structure if you have substantial equity you need in cash at closing, or if you have a VA loan and plan to buy again soon.
The Step-by-Step Texas Process
**1. Offer and terms.** The buyer confirms the loan balance, monthly payment, rate, escrow, and arrears, then offers a down payment plus takeover of the payment.
**2. Authorization to release.** You sign a form letting the buyer verify the payoff and payment history with your servicer.
**3. Title work.** A Texas title company runs the search, clears liens, and issues an owner's policy to the buyer.
**4. Closing.** You sign a warranty deed. The buyer signs a performance mortgage back to you, and typically a limited power of attorney so they can speak to the servicer.
**5. Servicing begins.** A third-party servicer takes over collection and remits your mortgage payment each month, generating the record you'll need later.
Typical timeline: 7 to 14 days from agreement to funding.
Five Protections to Insist On
A licensed third-party loan servicer, so payments are documented and visible to you. A performance mortgage recorded in your favor, so you can foreclose and reclaim the house if the buyer defaults. Proof of hazard insurance naming you as additional insured. A written due-on-sale exit plan. And a real down payment — a buyer with nothing in the deal has nothing to lose.
Full detail on each in subject-to risks for sellers.
What You Walk Away With
A down payment at closing, no commission, no repairs, no holding costs, and no monthly payment. What you don't get is your name off the loan — that happens when the buyer refinances or sells. See a real Bexar County example in our San Antonio case study.
If you want your name off the debt immediately, look at a formal assumption instead.