What is a “due on sale” clause?

A "due on sale" clause is a contract provision that is included in residential real estate law in Washington state. It states that the mortgage must be paid off immediately when the property is sold to a new buyer. This clause holds the seller of the property responsible for any remaining balances on the loan. It also means that any new buyers must cover whatever amount is owed on the loan to the lender. This clause is included in the agreement between the lender and the borrower, and is usually found in the deed of trust. The due on sale clause is intended to protect the lender from potential losses in the event of a sale, as the lender will be able to get the full amount owed to them if the loan is paid off. It also ensures that the lender will get the full amount of their loan before they have to worry about transferring the loan to the new owner. The due on sale clause is just one part of residential real estate law in Washington. Other important provisions include those pertaining to zoning, contract enforcement, and foreclosure. With the help of a real estate attorney, both buyers and sellers can understand their rights and responsibilities while participating in a real estate transaction in the state of Washington.

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What is a “due on sale” clause?

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