The Truth about Assumable Mortgages: Pros, Cons, and Considerations

Assumable mortgages represent a unique facet of the real estate world, offering both advantages and potential complexities for homebuyers and sellers.

In this post, we will delve into the fundamental concepts surrounding assumable mortgages, providing you with a clear understanding of what they entail and why they matter in the realm of home financing.

Definition of Assumable Mortgages

An assumable mortgage, simply put, is a type of home loan that allows a new homebuyer to take over the existing mortgage of the current homeowner.

This means that instead of securing a brand new mortgage from a lender, the buyer assumes the obligations, terms, and conditions of the seller's mortgage, including the remaining balance, interest rate, and monthly payments.

The Significance of Understanding Assumable Mortgages

Understanding assumable mortgages is crucial for both prospective homebuyers and sellers. For buyers, it opens up opportunities to acquire homes with favorable terms and potentially lower interest rates, especially in a rising rate environment.

For sellers, it provides an additional selling point and could expedite the sale of their property. However, it's essential to recognize that assumable mortgages come with their own set of rules, advantages, and potential challenges.

In the following sections, we will explore assumable mortgages in greater detail. We'll examine the basics of how they work, their potential advantages, and the risks involved.

We'll also discuss the types of assumable mortgages and the specific processes and considerations for both buyers and sellers.

By the end of this guide, you'll be well-equipped to make informed decisions regarding assumable mortgages, whether you're looking to purchase a home or sell one.

Assumable Mortgage Basics

Now that we've established what assumable mortgages are and why they are important, let's delve into the core concepts and mechanics that underpin these unique home loans.

Explanation of What an Assumable Mortgage Is and How It Works

An assumable mortgage is a type of home loan that enables a new buyer to take over the existing mortgage of the current homeowner.

This means that when you buy a home with an assumable mortgage, you step into the shoes of the original borrower and assume responsibility for the remaining balance, interest rate, and other terms of the loan.

The key takeaway is that the seller's mortgage is transferred to the buyer, allowing the buyer to continue making payments under the same loan terms.

It's essential to understand that not all mortgages are assumable, and even among those that are specific conditions and requirements may apply.

Differentiating Between Assumable and Non-Assumable Mortgages

One critical distinction in the world of mortgages is whether a loan is assumable or non-assumable. Non-assumable mortgages, also known as conventional mortgages, do not allow the transfer of the loan from the original borrower to a new buyer.

In such cases, when a property is sold, the seller must repay the entire loan balance with the proceeds from the sale, and the buyer secures a new mortgage.

Assumable mortgages, on the other hand, offer the unique advantage of allowing the buyer to step into the existing loan arrangement without the need to secure a new mortgage.

However, this privilege comes with certain requirements and considerations, as we'll explore in greater detail.

The Transfer Process: How a New Buyer Assumes an Existing Mortgage

Assuming an existing mortgage involves a specific process that typically includes the following steps:

  1. Negotiating with the Seller: The buyer and seller agree on the terms of the sale, including the purchase price and the decision to assume the mortgage.
  2. Lender Approval: The buyer must qualify for the assumption through the lender that holds the current mortgage. The lender will review the buyer's creditworthiness and financial stability to ensure they can take on the loan.
  3. Assumption Agreement: Once approved, an assumption agreement is drafted, outlining the terms and conditions of the transfer, including the loan balance, interest rate, and remaining payment schedule.
  4. Closing: The closing process, similar to a traditional home purchase, occurs, and the buyer assumes the mortgage during this stage.

The Role of the Lender and Approval in the Assumption Process

Lenders play a critical role in the assumption process. They are responsible for evaluating the creditworthiness of the new buyer and ensuring they can meet the financial obligations of the existing mortgage.

Lender-approval is a crucial step in the assumption process and is typically a prerequisite for a successful transfer.

In the next sections, we will explore the advantages and disadvantages of assumable mortgages, as well as the specific steps and considerations for both buyers and sellers involved in an assumable mortgage transaction.

Advantages of Assumable Mortgages

Assumable mortgages offer several advantages for both buyers and sellers, making them an attractive option in specific situations.

Let's explore these advantages in detail:

Lower Interest Rates:

One of the most significant advantages of assumable mortgages is the potential for lower interest rates. This advantage becomes particularly appealing in a rising interest rate environment. Here's how it works:

  • When you assume an existing mortgage, you inherit the interest rate set at the time the loan was originated. If market interest rates have increased since the original loan was secured, assuming the lower-rate mortgage can lead to substantial savings over the life of the loan.
  • Lower interest rates mean lower monthly mortgage payments, which can free up more of your budget for other expenses or savings.

Simplified Qualification:

Compared to obtaining a new mortgage, assuming an existing mortgage can be a simpler and faster process.

This is because:

  • Assumptions typically involve a streamlined credit evaluation of the new buyer. The lender primarily assesses the buyer's ability to make payments under the existing loan terms, rather than conducting a comprehensive new mortgage application review.
  • In a traditional mortgage application, the process can be more extensive, requiring detailed financial documentation and a more thorough credit check.
  • Assumable mortgages may have more lenient qualification criteria, making them accessible to buyers who might not qualify for a new mortgage.

Cost Savings:

Assuming an existing mortgage can result in significant cost savings for both buyers and sellers.

Some of the potential cost-saving aspects include:

  • Lower Closing Costs: Assumption transactions typically involve fewer closing costs compared to traditional home purchases. Buyers may avoid expenses associated with loan origination, appraisal, and other standard closing fees.
  • Favorable Loan Terms: By assuming a mortgage with attractive terms, buyers can secure better financing conditions than they might find in the current market.
  • Avoiding Prepayment Penalties: Some loans have prepayment penalties if paid off early. Assuming the existing mortgage allows the buyer to bypass these penalties.
  • Savings on Loan Application Fees: Buyers can save on application fees and other costs associated with a new mortgage application.
  • No Need for a New Appraisal: In some cases, you can avoid the cost of a new appraisal, as the original appraisal from the seller's purchase may still be valid.

In summary, assumable mortgages offer the potential for lower interest rates, simplified qualification processes, and cost savings, making them a valuable option for buyers and sellers seeking financial advantages in specific market conditions.

However, it's crucial to be aware of the potential disadvantages and limitations of assumable mortgages, which we'll explore in the following section.

Potential Drawbacks and Risks of Assumable Mortgages

While assumable mortgages offer several advantages, it's essential to be aware of potential drawbacks and risks associated with this type of transaction.

Here are some key considerations:

Existing Terms and Conditions:

Assuming an existing mortgage means taking on the terms and conditions set forth in the original loan agreement. This could have some limitations, including:

  • Interest Rate: If market interest rates have significantly declined since the original loan was secured, you might assume a mortgage with a higher interest rate than what you could obtain with a new mortgage.
  • Loan Term: You'll need to adhere to the remaining loan term, which might not align with your preferred timeline for homeownership.
  • Loan Type: You must assume the same loan type (e.g., fixed-rate, adjustable-rate) as the original mortgage.
  • Prepayment Penalties: Check if the original mortgage includes prepayment penalties, which could affect your ability to pay off the loan early without incurring additional costs.


While assumable mortgages can simplify the qualification process, your creditworthiness will still be evaluated to some extent.

The lender will want assurance that you can meet the existing loan's obligations. If your creditworthiness has deteriorated since the original mortgage was taken out, this could be a significant hurdle.

Responsibility for Defaults:

Assuming a mortgage means taking on the responsibility for making timely payments. If you fail to meet these obligations and the loan defaults, you risk damaging your credit score and facing potential foreclosure.

Additionally, the original borrower may still be liable for the loan, and their credit could also be affected if you default on the mortgage you assumed.

Seller's Liability:

For sellers, it's crucial to understand that even after the mortgage assumption, they might still be held partially liable for the loan if the new buyer defaults.

This is known as “seller's liability” and can vary depending on state laws and the specific terms of the assumption.

Limited Lender Choices:

Not all lenders offer assumable mortgages, and those that do might have specific criteria for approval.

This limitation can restrict your options when searching for a home, potentially limiting your choice of properties.

Lack of Negotiation on Terms:

When assuming a mortgage, you typically can't negotiate the terms of the loan, such as the interest rate or loan term.

You are locked into the existing conditions, which may or may not align with your preferences or financial goals.

Due Diligence:

To mitigate risks, both buyers and sellers should conduct thorough due diligence before proceeding with an assumable mortgage.

This includes reviewing the existing loan agreement, assessing the creditworthiness of the new buyer, and understanding the implications of the assumption on both parties' financial situations.

In summary, while assumable mortgages can offer advantages, such as lower interest rates and reduced closing costs, they come with limitations and potential risks.

It's essential to carefully evaluate your specific circumstances and financial goals before deciding whether an assumable mortgage is the right choice for you.

Consulting with a qualified real estate and financial advisor can also provide valuable guidance in this process.

Types of Assumable Mortgages

Assumable mortgages come in various forms, and the assumability of a mortgage can depend on the type of loan and specific terms. Here's an overview of assumable mortgages based on different loan types:

1. FHA (Federal Housing Administration) Loans:

FHA loans are known for their assumability. They are fully assumable, which means that a qualified buyer can take over the existing FHA loan without needing to qualify for a new loan.

Key points to consider:

  • Creditworthiness: While FHA loans are assumable, the lender may still assess the creditworthiness of the new borrower to ensure they can meet the loan obligations.
  • MIP (Mortgage Insurance Premium): If the original FHA loan had an MIP, the new borrower may be required to pay ongoing MIP premiums.

2. VA (Department of Veterans Affairs) Loans:

VA loans are also known for their assumability, and the process is relatively straightforward:

  • Eligibility: The assumption of a VA loan is generally limited to qualified veterans or active-duty service members who meet the VA's eligibility criteria.
  • VA Approval: The new borrower must meet VA credit and income standards and obtain approval from the VA.
  • Funding Fee: In some cases, a funding fee may apply when assuming a VA loan, depending on the circumstances.

3. Conventional Loans:

Conventional loans can be assumable, but they are typically less so than FHA or VA loans.

Assumptions of conventional loans often require lender approval and may involve stricter criteria:

  • Lender's Discretion: Whether or not a conventional loan is assumable is at the lender's discretion and may depend on the specific terms of the loan agreement.
  • Credit Check: Lenders may assess the creditworthiness of the new borrower and require them to meet certain financial standards.
  • Assumption Agreement: An assumption agreement is typically signed by both parties, outlining the terms and conditions of the assumption.

Due-on-Sale Clauses:

It's important to note that many mortgages, regardless of type, include a “due-on-sale” clause.

This clause allows the lender to demand full repayment of the loan if the property is sold or transferred to a new owner.

However, there are exceptions and limitations to due-on-sale clauses:

  • Exceptions: Federal law prohibits enforcing the due-on-sale clause in specific situations, such as when a property is transferred due to inheritance, divorce, or certain estate planning activities.
  • Loan Assumption: If a mortgage includes an assumable feature and the new buyer meets the lender's criteria, the lender may allow the assumption without triggering the due-on-sale clause.
  • Lender's Discretion: Ultimately, whether the due-on-sale clause is enforced may depend on the lender's discretion and the specific circumstances of the assumption.

Before proceeding with the assumption of any mortgage, it's crucial for both buyers and sellers to review the existing loan agreement, understand the terms and conditions, and consult with legal and financial professionals to ensure compliance with all applicable laws and regulations.

The Assumption Process

Assuming an existing mortgage involves a specific process that both the buyer and seller need to follow.

Here is a step-by-step guide to understanding the assumption process:

1. Contact the Lender:

The first step is for the potential buyer (assuming the borrower) to contact the lender that holds the existing mortgage. They should inquire about the possibility of assuming the loan.

2. Review the Loan Agreement:

The seller should provide the buyer with a copy of the existing loan agreement. Both parties should thoroughly review the terms and conditions to understand the obligations and limitations.

3. Qualification and Credit Check:

The lender will assess the creditworthiness of the assuming borrower. This may involve a credit check and verification of financial stability.

4. Assumption Agreement:

If the buyer qualifies and the lender approves, an assumption agreement is drafted. This agreement outlines the terms of the assumption, including the interest rate, loan balance, and repayment schedule.

5. Closing Process:

The assumption typically involves a closing process, similar to a traditional home purchase. This may include a title search, appraisal, and other necessary assessments.

6. Closing Costs:

The buyer and seller should negotiate who will cover the closing costs. In some cases, the buyer may assume responsibility for these costs.

7. Legal Transfer:

The title of the property is transferred from the seller to the buyer, with the assumption agreement reflecting the change in ownership and responsibility for the mortgage.

8. Lender's Approval:

Before the assumption is finalized, the lender must approve the transaction. This may involve a review of the assuming borrower's financial documents and creditworthiness.

9. Notify Credit Bureaus:

Once the assumption is complete, it's essential for both parties to notify credit reporting agencies about the change in mortgage ownership. This helps ensure that the mortgage payment history is accurately reflected on credit reports.

10. Post-Assumption Responsibilities:

After the assumption, the assuming borrower is responsible for making regular mortgage payments and complying with all terms and conditions of the loan agreement.

It's important to note that the assumption process can vary depending on the lender and the specific terms of the existing mortgage.

Buyers and sellers should work closely with the lender, real estate professionals, and possibly legal counsel to navigate the process successfully.

Additionally, it's advisable for both parties to understand their rights and responsibilities fully and to consult with financial and legal experts as needed to ensure a smooth and legally compliant assumption.

Implications for Sellers

Sellers have various considerations when it comes to the assumption of their mortgage.

Here's an overview of the implications for sellers:

1. Promoting Mortgage Assumption:

Sellers may consider promoting the assumption of their mortgage as a selling point for their property.

This can be particularly attractive to potential buyers when interest rates on the existing mortgage are lower than current market rates. It can make the property more appealing and competitive in the real estate market.

2. Impact on Credit:

Sellers need to be aware that even after the assumption, they may still be on the hook for the mortgage if the assuming borrower defaults. Late payments or defaults by the new owner can negatively impact the seller's credit.

Therefore, it's crucial for sellers to carefully evaluate the creditworthiness of the assuming borrower and stay informed about the mortgage's status.

3. Financial Responsibilities:

Sellers should also recognize that while the mortgage may be assumed, they might still be responsible for certain financial aspects related to the property.

This can include property taxes, homeowner association fees, and maintenance costs until the property officially changes hands. These responsibilities should be clearly outlined in the assumption agreement.

4. Seller Financing:

If a seller prefers more control over the financing terms, they may consider seller financing as an alternative to mortgage assumption. In a seller financing arrangement, the seller essentially becomes the lender and provides financing to the buyer directly.

This can allow for more flexibility in terms and may not require lender approval. However, sellers should be cautious and seek legal and financial advice when considering this option.

5. Legal and Financial Counsel:

It's advisable for sellers to consult with legal and financial professionals before proceeding with a mortgage assumption or seller financing arrangement.

These experts can help sellers understand the legal implications, protect their interests, and ensure a smooth transaction.

In summary, while mortgage assumption can benefit sellers by making their property more attractive to buyers, sellers should carefully evaluate the financial and credit implications.

Additionally, exploring alternative financing options, such as seller financing, may provide more control over the terms of the sale.

Ultimately, sellers should seek professional advice and thoroughly understand the potential outcomes before deciding on the best approach to selling their property.

Implications for Buyers

Buyers considering assuming a mortgage should be aware of the potential benefits, qualification requirements, and important considerations.

Here's an overview:

1. Benefits of Assuming a Mortgage:

  • Lower Interest Rates: One of the primary benefits for buyers is the opportunity to assume a mortgage with a lower interest rate than what is currently available in the market. This can result in lower monthly payments and long-term savings on interest costs.
  • Reduced Closing Costs: Mortgage assumption typically involves lower closing costs compared to obtaining a new mortgage. This can make homeownership more affordable for buyers.
  • Faster Closing Process: Assuming a mortgage can often lead to a faster closing process compared to securing a new mortgage, which can be especially advantageous in competitive real estate markets.

2. Qualification Requirements:

  • Creditworthiness: Buyers must meet the creditworthiness standards of the lender to assume a mortgage. While the credit requirements may be more lenient than those for a new mortgage, assuming borrowers still need to demonstrate a level of financial stability.
  • Approval from the Lender: The lender holding the existing mortgage must approve the assumption. This typically involves an application process where the assuming borrower provides financial information and undergoes a credit check.
  • Assumption Agreement: Both the seller and buyer need to agree to the terms of the assumption in writing, often through an assumption agreement. This agreement outlines the responsibilities and obligations of each party.

3. Eligibility Considerations:

  • Mortgage Type: The assumability of a mortgage depends on the type of loan. FHA and VA loans are known for their assumable features, while conventional loans may have more restrictive terms.
  • Due-on-Sale Clause: Buyers should be aware of the due-on-sale clause in the existing mortgage. This clause gives the lender the right to demand full repayment of the loan when the property changes ownership. However, certain exceptions and limitations may apply.
  • Financial Evaluation: Buyers should conduct a thorough financial evaluation to ensure they can comfortably manage the mortgage payments and any associated costs. This includes assessing their own creditworthiness and the financial stability of the seller.

4. Making an Informed Decision:

  • Buyers should carefully assess whether assuming a mortgage aligns with their long-term financial goals and homeownership plans. They should consider factors such as the interest rate, loan balance, remaining term, and the financial health of the seller.
  • Seeking professional advice, including consulting with real estate agents, financial advisors, and attorneys, can provide valuable insights and guidance throughout the assumption process.
  • Before proceeding with a mortgage assumption, buyers should conduct due diligence by reviewing the existing mortgage terms, the property's condition, and any potential liabilities associated with the assumption.

In conclusion, assuming a mortgage can offer significant benefits to buyers, including lower interest rates and reduced closing costs.

However, buyers should be prepared to meet credit and eligibility requirements and thoroughly evaluate the terms of the assumption.

Seeking professional advice is essential to make an informed decision and navigate the assumption process successfully.

Real-World Scenarios and Case Studies

To provide a deeper understanding of mortgage assumptions, let's explore real-world scenarios and case studies involving successful mortgage assumptions, challenges, and their impact on different financial profiles and property types:

1. The Smooth Transition:

Case Study: Jane and Mark, a young couple, found their dream home but were worried about securing a mortgage with high-interest rates.

The seller, who had an assumable FHA loan with a low fixed rate, offered to let them assume the mortgage.

With a straightforward assumption process and lower monthly payments, Jane and Mark were able to purchase their home with ease, saving money in the long run.

2. A Challenging Credit Scenario:

Case Study: Sarah, a single mother with a less-than-perfect credit score, wanted to buy a home but struggled to qualify for a new mortgage.

She found a seller willing to allow a mortgage assumption, which had more lenient credit requirements.

Although her interest rate was slightly higher than current market rates, the assumption provided Sarah with an opportunity to become a homeowner.

3. The Unexpected Due-on-Sale Clause:

Case Study: John, a buyer, was excited to assume a conventional mortgage with an attractive interest rate.

However, shortly after moving in, he discovered that the mortgage had a strict due-on-sale clause.

The lender demanded full repayment, leaving John with limited options. He eventually secured a new mortgage, but the experience highlighted the importance of thoroughly understanding the terms before proceeding with an assumption.

4. A Property with Appreciating Value:

Case Study: Michael, an investor, was interested in a rental property with significant potential for appreciation.

The seller had an assumable mortgage with a reasonable interest rate. Michael assumed the mortgage, allowing him to purchase the property without the need for a new loan.

As the property's value increased over time, he was able to access additional equity through a HELOC, demonstrating the strategic use of mortgage assumptions.

5. The Complex Jumbo Loan Assumption:

Case Study: Lisa and David sought to purchase a luxury home with a large jumbo mortgage. They found a seller with an assumable jumbo loan, which was relatively rare.

The assumption process was more complex due to the larger loan amount and specific lender requirements.

However, with the help of financial advisors and legal experts, Lisa and David successfully assumed the jumbo loan, allowing them to acquire their dream home.

These case studies illustrate the diverse scenarios and outcomes associated with mortgage assumptions. Successful assumptions can offer buyers advantages in terms of lower interest rates, reduced closing costs, and faster closings.

However, challenges can arise, such as due-on-sale clauses or complex loan types. Buyers and sellers considering mortgage assumptions should carefully evaluate their unique circumstances and seek professional advice when necessary.

Legal and Financial Considerations

When dealing with mortgage assumptions, there are significant legal and financial considerations for both buyers and sellers.

Understanding the legal and contractual obligations and seeking professional guidance is crucial.

Here are some key points to consider:

1. Legal and Contractual Obligations:

  • Due Diligence: Buyers and sellers must perform due diligence to understand the terms and conditions of the existing mortgage. Review the original loan agreement to identify any specific clauses or restrictions related to the assumption.
  • Due-on-Sale Clause: Most mortgages have a due-on-sale clause, which allows the lender to demand full repayment if the property changes ownership. Buyers and sellers should be aware of this clause and its implications.
  • Assumption Agreement: The assumption process typically involves signing an assumption agreement with the lender. This legal document outlines the responsibilities of the buyer, seller, and lender in the assumption process.
  • Transfer of Title: The transfer of title from the seller to the buyer is a critical legal aspect of mortgage assumption. This transfer must comply with local and state laws.

2. Financial Advice and Professional Guidance:

  • Financial Advisors: Both buyers and sellers should consult with financial advisors or planners to assess the financial implications of mortgage assumptions. Advisors can help evaluate whether the assumption aligns with long-term financial goals.
  • Legal Counsel: It's advisable for both parties to seek legal counsel. Real estate attorneys can review contracts, ensure compliance with local laws, and protect the interests of buyers and sellers.
  • Real Estate Professionals: Real estate agents or brokers with experience in mortgage assumptions can provide valuable guidance throughout the process. They can connect buyers and sellers with qualified professionals and facilitate a smooth transaction.
  • Credit Counselors: Buyers with credit concerns should consider consulting credit counselors who can help improve creditworthiness and navigate potential credit challenges during the assumption process.

3. Transparency and Disclosure:

  • Full Disclosure: Sellers should provide comprehensive information about the mortgage, including current loan balance, interest rate, remaining term, and any outstanding issues, to potential buyers. Transparency is essential to avoid surprises during the assumption process.
  • Lender Communication: Effective communication with the lender is crucial. Buyers and sellers should maintain open lines of communication with the lender to ensure that all necessary documentation and approvals are in place.

4. Professional Fees and Costs:

  • Attorney Fees: Both parties should be prepared for attorney fees associated with reviewing contracts and ensuring legal compliance.
  • Lender Fees: Buyers may incur fees associated with loan assumption, such as assumption fees charged by the lender.
  • Closing Costs: While mortgage assumptions generally have lower closing costs compared to new loans, there may still be some costs involved, such as title insurance and recording fees.

Navigating the legal and financial aspects of mortgage assumptions can be complex.

Seeking professional guidance and carefully reviewing all legal documents and contracts are essential steps to ensure a successful and legally compliant transaction.

Conclusion: Making Informed Decisions

In conclusion, assumable mortgages offer a unique set of advantages and considerations for both homebuyers and sellers.

Here's a recap of the key points discussed in this guide:

  • Assumable Mortgage Basics: Assumable mortgages allow buyers to take over the existing mortgage of a seller, potentially offering lower interest rates and reduced closing costs compared to obtaining a new mortgage.
  • Advantages of Assumable Mortgages: Assumable mortgages can provide lower interest rates, simplified qualification processes, and cost savings in terms of closing costs and fees.
  • Potential Drawbacks and Risks: Buyers should be aware of existing terms and conditions, the need for creditworthiness, and the responsibility for defaults when assuming a mortgage.
  • Types of Assumable Mortgages: Different types of mortgages, including FHA, VA, and conventional loans, may or may not be assumable, and they may have varying requirements.
  • The Assumption Process: The assumption process involves several steps, including due diligence, documentation, and legal considerations. It's essential for both buyers and sellers to understand and adhere to these steps.
  • Implications for Sellers: Sellers may benefit from promoting the assumption of their mortgage, but they should be aware of the impact on their credit and financial responsibilities.
  • Implications for Buyers: Buyers can benefit from assuming a mortgage if it aligns with their financial goals, but they must meet qualification requirements and carefully assess the terms of the existing loan.
  • Real-World Scenarios and Case Studies: Real-world examples shed light on successful mortgage assumptions and challenges faced by individuals in the process.
  • Legal and Financial Considerations: Mortgage assumptions involve legal and financial complexities that require careful consideration. Seeking professional advice and adhering to contractual obligations are critical.

Informed decision-making is paramount when considering an assumable mortgage. Prospective homebuyers and sellers should evaluate their unique financial circumstances, long-term goals, and risk tolerance.

While assumable mortgages can be advantageous in specific situations, they may not always be the right choice.

Understanding the implications and responsibilities associated with mortgage assumptions empowers individuals to make the best decision for their home financing needs.

In the ever-evolving landscape of home financing, assumable mortgages represent a valuable option that, when utilized thoughtfully, can benefit both parties involved in a real estate transaction.