Which subject-to seller is actually easier, the one two payments behind or the one just moving?

Question

Two very different sub-to conversations are worth comparing side by side. Seller A is behind. Two payments missed, a notice from the servicer, a 3.6% loan, essentially no equity left after arrears and fees. She wants out and wants her credit intact. The deal solves a real problem for her, which makes price easy to agree on, and the loan itself is the good kind. But it means bringing arrears money, working on someone else's timeline, and absorbing the loss if she changes her mind midway. Seller B is fine. Relocating in four months, 3.9% loan, about 40k of equity, no pressure at all. Nothing urgent forces a decision, and he can walk to a regular listing any day. But there's no reinstatement to fund, no clock, and diligence can happen at a normal pace. The common wisdom is that sub-to works particularly well with distressed sellers, which points toward A. A more conservative posture, especially with limited reserves, tends to favor B. Both read as reasonable, and the right call usually comes down to how much risk capital and timeline flexibility the buyer actually has.

diane_kowalski · Answer

Seller B can list the house the morning after you agree on everything and there's nothing you can do about it. That's not a small risk, that's most of the risk.

nicole_adeyemi · Answer

With A you are buying a deadline along with the house. A common way that deal dies is the reinstatement quote coming back higher than the seller said, with nine days left on the clock. If you take that deal, get the reinstatement figure from the servicer in writing yourself before you commit anything.

priya_n21 · Answer

The credit angle in A matters more to sellers than most buyers realize. Preserving her credit while the payments keep going is the thing she will say yes to. It also means her name stays on that loan for years, and she has to genuinely understand that before she signs.

hannah_west29 · Answer

Numbers side, cairn. A is 3.6% with no equity purchase, so the cash in is arrears plus closing plus reserves, call it low five figures and you are done. B is 3.9% plus 40k of equity, which is either cash you do not have or a seller note that raises the monthly. On payment alone A is cheaper to own. The 40k in B buys calendar time and a seller who is not panicking. Whether that is worth 40k depends on how thin the reserve is, and you said it is thin.

laurenkim53 · Answer

In smaller markets the seller behind on payments is usually the only subject-to conversation on offer. Choosing between seller types is a luxury of a bigger metro.

Which subject-to seller is actually easier, the one two payments behind or the one just moving?

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