how does owner financing work in texas?

Asked by freescalecharlo, Austin, TX Wed Jan 30, 2013

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Annette Law…, Agent, Palm Harbor, FL
Thu Mar 20, 2014
Works extremely well.
The owner sells the home at a profit.
The owner makes more money on the financing.
The owner has a marketable note (performing asset) in three years
The buyer does not participate in the care and feeding of the big banks.
The buyer has an opportunity to be an owner. (not true with RTO and Lease/options)
The buyer can be forgiven some previous financing missteps.
This is a great solution, but, don't be naive.
The water does have sharks.
Don't go in without someone looking out for your best interests.

Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, Fl
727.420. 4041
1 vote
hammettgrl05, Home Owner, Gladewater, TX
Thu Mar 20, 2014
Under owner financing, can a seller use her personal business (oilfield company) as the sole lien holder?
1 vote
A business offering home financing will be governed by the Dobbs-Frank Consumer Protection Act. A business would be crazy to expose themselves to this risk for the sale of one home. In such a case the tail will be wagging the dog.
Flag Thu Mar 20, 2014
Guy Gimenez, Agent, Austin, TX
Wed Jan 30, 2013
The process is not all that complicated in practice and when practiced by those who are very familiar with the process, but it's far too complicated to explain in a forum such as this. I buy and sell using owner financing all the time. It can be done quite successfully when all the "t's" are crossed and "i's" dotted. Being thorough is key in these types of transactions. Owner financing is a growing segment of our market and is will most assuredly continue to grow in the coming years.

I am both a broker and investor and will be glad to provide you additional details if you want to email me privately or call, as the discussion will be lengthy.

Guy E. Gimenez
Broker / Investors
The PowerHouse Group / Globe Assets
1 vote
yes please I am selling my house owner financed in Tx need help on doing it so I don't get myself in a mess I'm tired of renting it and remolding everytime someone moves out I am asking this guy for 10 percent down Im selling only for 75 k, he informed me that he has bad credit due to divorce.
Flag Tue May 6, 2014
My name is Sharon I'm interested in the owner finance can you help me with this process my email address is
Flag Fri Nov 15, 2013
Neatherlinki…, Home Buyer, Austin, TX
Tue May 3, 2016
Can I owner finance my land in Texas?
0 votes
We did owner financing on our land although they are current on the land payment they are 3 yes behind on the taxes I told my ex that's default right there He also owner financed our trailer separate from the land they are 3payments behind as of today and taxes as well the mortgage company sent him a letter that he was in default and to have the payments in by the 31st the tenants won't answer his phone calls I have convinced him to send them a certified letter to make payments and taxes by or on the 31st other wise vacate and if not eviction process will start. I am writing g them a letter as well that they are in default on the land for non payment of taxes by the 31st of may or vacate the property or I will start eviction process the house is in his name and land is in his and mine we are divorced
Flag Tue May 3, 2016
Susie Kay, Agent, Dallas, TX
Sat Mar 22, 2014
It can get complicated. Are you trying to purchase a property with owner financing or are you trying to do owner financing on your property?

Susie Kay, Realtor®
United Real Estate
III Lincoln Centre, 5430 LBJ Freeway #280
Dallas, TX 78240

Servicing your real estate need is my priority!
0 votes
JOSEPH E JAR…, Agent, Austin, TX
Wed Jan 30, 2013
As you have probably already read, it can be a fairly complex endeavor and you should only do Seller financing IF you cannot get financing through a bank or lender. You will pay a higher percentage and if there's an existing mortgage on the house, you risk losing everything you have paid the seller If that seller defaults on the note themselves, even if you are paying them on time.

If your credit is fair and you have a decent down payment, please give me a call and I will be happy to speak with you and refer you to a lender who can assess your situation at no cost to you. If you decide to do this on your own, I would be very, very careful.

Joe Jarusinsky, Realtor/Master Instructor, Keller Williams Realty, Austin's #1 Real Estate Company, Ranked #1 by Buyers and Sellers (JD Power & Assoc. 2012) Call 512-261-4415
0 votes
Pippa Lambert, , Austin, TX
Wed Jan 30, 2013
Yes... what Tim said. The nuances are state-centric but, yes, it is legal in Texas to owner finance a home whether or not there exists an underlying lien. We strongly suggest you utilize the services of an agent, an attorney and a title company skilled and experienced with the type of transaction in which you are participating (ALWAYS, not just in this circumstance). You may contact me directly if you would like a referral to such an attorney and title company.

Thank you for being part of my day,
- - - - - - - - - - -
Pippa Lambert
Owner/Realtor®/Investor | Home Haven Partners
0 votes
Bruce Lynn, Agent, Coppell, TX
Wed Jan 30, 2013
It really doesn't.
You have to think logically about this.
It really only works if the seller owns the house outright.
Very few people do.
If they still have financing in place it doesn't work and often will get both you and the seller in trouble.
It's very risky if the seller has financing in place already.

Sure lots of people think they have some way around it , but more often than not it's just a problem for the buyer and sometimes also for the seller.

I can probably count on one hand the legitimate owner financed deals I've seen, but I've seen plenty that were really messed up and I'm not sure even solvable.

If you are not ready to buy with bank financing, save your money, don't get ahead of yourself and get your credit cleaned up and save your money.
0 votes
Walter Kenne…, Agent, Kyle, TX
Wed Jan 30, 2013
As a buyer you should want to make sure the home is deeded into your name at closing. This does not happen with all sellers.

You should also make sure to obtain a title policy to make sure the seller is the true owner of the property. Also to make sure there are no other liens on the property. There are alot of other items that should be addressed but, these are all property specific. If there is a balloon what happens if the buyer cannot qualify? Who pays the taxes and when (don't assume anything).

Alot of seller finance utilizie service companys which collect the payment from the buyer and pay the taxes, insurance and the seller every month. They also make sure the payments are being made. They act as the collector or collection company. They act just like a banks service company (for the seller). They also report the tax information to both the seller and the buyer.

We have listed and sold several property's in our office owner finance. (We have only list one's that are lien free). We make them close at a title company and the buyer is provided a payment coupon at closing.

The rates sellers are willing to owner finance in the area varies (6-18%) So if you can qualify to buy a home through a bank do it. The traditional lending rate is very very favorable now.

Let me know there are 200+ homes on the MLS offering owner finance (they require a down payment normally 20% down).

Walter Kennedy
Rooster Realty
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Wed Jan 30, 2013
It works the same as it does in all the other 49 states. Owner and buyer agree on terms, buyer pays owner agreed monthly payments for agreed term. Often there is a balloon payment after some amounbt of years because the seller does not want to play bank for 30 years. It is all in what you agree on and I would have it written up by a lawyer.

Unless there is some reason you can not get a loan, I would look at a bank loan because interest rates are ridiculously low and you can get a 30 year loan. You can also be looking at fha loans with rates under 4% which will be assumable in the years to come and after rates go up and up these assumable loans will be RED HOT and help you sell later.
0 votes
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