How It Works

How It Works – A Smarter Way to Sell Your Home

Traditional home-selling methods can be slow, uncertain, and stressful. At Creative Real Estate, we provide a faster, more flexible alternative through creative financing solutions, including Subject-To transactions. This approach allows sellers to transfer ownership without waiting for bank approvals, ensuring a smooth, hassle-free closing.
What is a Creative Transaction?

A Creative Transaction is a real estate purchase where the buyer takes ownership, but the existing loan remains in the seller’s name. This method, known as Subject-To, allows us to take over payments and manage the property without requiring the seller to pay off the mortgage upfront.

Why Would a Seller Choose This Option?

✅ Higher Cash at Closing – Sellers often walk away with more money than in a traditional sale.
✅ Immediate Relief from Payments – No more worrying about mortgage, taxes, or maintenance.
✅ No Repairs Needed – We buy homes as-is, saving you time and money.
✅ Credit Protection – On-time mortgage payments improve your credit score instead of damaging it.

How We Ensure Seller Protection

We prioritize security and transparency to protect sellers throughout the transaction:

✔ Servicing Company – A third-party service provider handles mortgage payments, ensuring they are made on time, with monthly payment confirmations sent directly to the seller. We work with trusted companies:
    🔹 Westloan
    🔹 Young Inc

✔ Deed of Trust – The seller retains a deed of trust as additional security, ensuring their interests are protected.
✔ Legal Oversight – Every transaction is processed through a licensed real estate attorney and title company for full compliance.
✔ Insurance Coverage – The property remains insured, protecting against unexpected damages.
✔ Promissory Note & Escrow Reserves – Additional safeguards guarantee that payments are handled responsibly.

Common Questions About Subject-To Transactions

Is This Legal?

✅ Yes! HUD-1 Settlement Statements recognize Subject-To transactions as a legal and established method of transferring property ownership.

[📄 Click Here To View Document] – The HUD-1 form is a standard document used by title and escrow companies to build settlement statements.
    🔹 Line 203: Used when a borrower assumes or takes title subject to an existing loan.
    🔹 The Code of Federal Regulation (CFR) confirms this is a legally recognized process.

What About My Debt-to-Income Ratio (DTI) When Buying a New Home?

🏡 Lenders can exclude the mortgage payment from your obligations if on-time payments are made for three months.

How Long Will the Mortgage Stay in My Name?

⏳ Typically 5-7 years, but sometimes for the remainder of the loan term, depending on our agreement. We refinance or pay off the loan when market conditions are favorable.

What if the Due-On-Sale Clause is Triggered?

Banks rarely call a loan due if payments are made on time. In the rare event it happens, we either refinance, pay off the loan, or return the property to the seller.