Florida 45 Hour Post License Practice Exam 2025 – The Complete All-in-One Guide to Success!

Question: 1 / 400

What does "Subject to" mean in real estate transactions?

The buyer accepts full responsibility for all liens

The buyer acknowledges the home has a lien but does not accept personal responsibility

In real estate transactions, the term "Subject to" indicates that the buyer is aware of existing liens or encumbrances on the property but does not assume personal responsibility for them. This means that while the buyer acknowledges the presence of these liens, they acquire the property “subject to” those existing terms and obligations. The original seller remains ultimately responsible for the debt or lien, and the buyer's investment is based on the property itself, not the debts tied to it.

This concept is crucial for buyers and investors because it allows them to purchase properties that may have outstanding debts without immediately having to pay those debts off. It often applies in situations such as taking over a mortgage where the lender may not require formal assumption of that mortgage by the new buyer. Understanding this concept helps buyers gauge their financial responsibility when stepping into a property with existing financial obligations.

Get further explanation with Examzify DeepDiveBeta

The buyer is required to pay off all existing debts

The buyer fully owns the property free and clear of any debts

Next Question

Report this question

Download Florida 45 Hour Post License Practice Exam 2025 – The Complete All-in-One Guide to Success! PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy