In this guide, we’ll walk you through the steps and key considerations when listing a property that has an active mortgage or lien, especially when working with a cash buyer.
You’ll learn how to identify whether a property has a lien, what documents are needed (like both deeds and the loan payoff letter), what questions to ask your seller upfront, and how the cancellation process works with different types of lenders. We’ll also cover important timing expectations, how funds are managed at closing, and how to protect both buyer and seller interests throughout the transaction.
Key Points
Initial Checklist for Listing Agents
-
Ask the seller directly if the property has a mortgage or is being used as collateral.
-
Request scanned copies of both deeds (purchase deed and mortgage deed) if applicable.
-
Upload scanned deeds to the internal server and bring originals to closing.
How to Identify a Mortgage on a Property
-
Review the escritura for loan clauses.
-
Ask sellers if they’ve used the home for a loan post-purchase.
-
Examples to review: Taheima, Casa Camacho, Casa Fresnos, Oceano Plata, Casa Sol y Luna.
Understand the Lender Type
-
Bank
-
INFONAVIT
-
COFINAVIT
-
Personal loan
Important Questions to Ask the Seller Early
-
Is the loan already paid off?
-
What is the outstanding balance?
-
Can the payoff be made from escrow or does it require direct seller payment?
-
When is the loan’s payment cutoff date?
-
Start the conversation about the Carta Saldo (loan payoff letter) even before an offer.
What to Do When You Have an Offer
-
Request the Carta Saldo addressed to the notary.
-
Understand lender timelines—some update closer to closing.
-
Coordinate with the notary and buyer agent.
Cost Considerations
-
Request a Capital Gains Tax estimate.
-
Get a mortgage cancellation cost estimate as part of your closing cost overview.
Setting Expectations with the Buyer (Cash Buyer)
-
Confirm who the lender is (bank, INFONAVIT, etc.).
-
Expect a minimum of 3 months to close (faster only if all documents are ready).
-
Delivery of property happens at the closing table.
Buyer Protections at Closing
-
Full purchase funds must be in escrow before closing.
-
Part of the funds will go to pay off the seller’s loan.
-
Remainder held in escrow until loan cancellation is confirmed.
-
Example: Casa Fresnos disbursement structure.
What the Deed Will Say
-
First section confirms the loan cancellation.
-
This is perfected once the official lender letter is received.
-
Be transparent about timing—Scotiabank, for instance, can take weeks.
