Plain-English guide. Not legal advice. A lawyer should review anything you sign.
Subject-to, without the jargon
The buyer takes the house. The seller's loan stays in the seller's name.
People use subject-to deals when a low-rate loan is already on the house and a new loan would cost more. The buyer usually pays the seller some cash and then pays the existing loan.
The existing lender often has the right to call that loan due because the house changed hands. If the lender does, someone has to pay the whole balance quickly. The seller is still the borrower on the bank's books, so missed payments hurt the seller's credit.
This is not the same as an FHA or VA assumption, which the lender approves. Do not list or buy a subject-to deal without a lawyer who has done one in that state.