What does "subject to" refer to in real estate?

The phrase "subject to" in real estate specifically refers to a situation where the buyer takes over the seller's existing mortgage payments. This means that the buyer is acquiring the property while the mortgage remains in the seller's name, and the buyer is responsible for making the payments on that loan. This arrangement can be beneficial for buyers who may not qualify for a new mortgage or are looking to assume a lower interest rate than what is currently available in the market.

In a "subject to" transaction, the seller remains legally liable for the mortgage, which means the lender could still seek repayment from the seller if the buyer fails to make the payments. However, this arrangement allows the buyer to leverage the existing financing without formally assuming the loan, creating a unique pathway to property ownership.

The other options present different scenarios that don't capture the essence of "subject to." For instance, a type of sale requiring full payment upfront is unrelated to the existing financing or liabilities. Conditional sales based on property inspections or requiring renegotiation of terms also don't relate to the continuation of the seller's mortgage obligations. Thus, the accurate understanding of "subject to" focuses solely on the relationship with the existing mortgage payment responsibilities.