Rent to Own or Seller Financing which is best?


Overview of Rent to Own

The buyer has either no down payment or small down-payment which later gets converted into a contract for deed.

Pros: low or no down payment

Cons: Very complicated, most people are not educated enough about them. They involve much paperwork that needs to be filed every few months. Very legally complicated

Overview of Seller Financing

Pros: low down payment. Both buyer and seller can come out on top

Cons: Some down payment is necessary



Owner finance, though more limited and regulated than ever before, is nonetheless alive and well in Texas. Greater consumer protection has been achieved by Prop. Code Sec. 5.061, the S.A.F.E. Act, and Dodd-Frank, but these measures have also had the effect of raising closing costs, particularly if an RMLO intermediary agent is involved. Consult a qualified real estate attorney before entering into a sales contract calling for owner finance and never use forms off the internet to set up a wrap or land trust. Liability for sellers under the revised Property Code is too great to take the risk.


Information in this article is proved for general educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well. This firm does not represent you unless and until it is retained and expressly retained in writing to do so.

Copyright © 2015 by David J. Willis. All rights reserved worldwide. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website,
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