Rob notices a new subdivision opening up on the outskirts of town. Rob also noticed the advertisement saying how you can purchase one acre for $35,000 with no credit, a low down payment and you can owner finance the balance. Rob decides to visit the office and inquire about the lots. Even though Rob doesn't have too much money left over after he has paid all his bills, Rob ends up purchasing an acre tract of land. Rob tenders payments for one year and decides he can no longer afford to keep the property any longer. Rob calls his friend Dewey and sells him the American dream of owning property. Rob did this without informing the seller/lender who sold and financed the acre to him.

This is one instance where someone does an assumption. Although, it was not the correct way to assume a property, nevertheless, it is an assumption. An assumption is where a buyer takes title to property by deed, and the buyer assumes to continue to pay the note currently owed to the lender. Furthermore, the buyer further assumes to be responsible for the terms listed on the deed of trust, the security agreement the buyer signed when he also signed the note. There are other documents that can be assigned when doing an assumption as well.

If there is a lender, you must obtain his permission first in writing, as that is what normally is stated in the deed of trust.

One thing to consider when doing an assumption is deciding whether the grantor (seller) selling the property will still continue to be responsible for the note and any other responsibilities as listed on the deed of trust, even though he does not own the property any longer.