Seller financing done right, from the first document to the final payment.
Owner financing can open deals that traditional lending cannot close. But Texas law imposes specific requirements on seller-financed real estate transactions, and the documents that govern these deals carry significant legal weight for both the buyer and the seller.
After regulatory changes took effect in 2005, two forms of owner financing remain viable in Texas: the conventional owner finance and the wraparound transaction. Each has a distinct legal structure, different documentation requirements, and different risk profiles for the parties involved.
We prepare the documents that make owner-financed transactions enforceable, compliant, and clearly structured so both sides understand their rights and obligations from day one.
The buyer's written promise to repay the seller under agreed terms. Sets the interest rate, payment schedule, maturity date, and consequences of default.
Secures the promissory note by placing a lien on the property. If the buyer defaults, the deed of trust gives the seller the right to foreclose and recover the property.
A Texas-specific form of promissory note used in conjunction with a deed of trust. Commonly used in conventional owner finance transactions in place of a standard note.
Documents the buyer's payment obligation in a wraparound transaction, where the seller's existing mortgage remains in place and the buyer pays the seller directly.
Secures the wraparound note by creating a lien on the property that wraps around the seller's underlying financing obligation.
Required disclosures that inform the buyer of the property's known condition and any material facts that could affect the value or desirability of the transaction.
Documents and discloses the terms of any balloon payment due at the end of the note period, as required under Texas law for certain seller-financed transactions.
Formally amends the terms of an existing owner finance note, whether to adjust the interest rate, extend the maturity date, or restructure the payment schedule.
Clients choose us for our comprehensive legal solutions, responsive service, and commitment to achieving their goals through practical, cost-effective strategies.
"The team at Stuart Allen Law Firm restructured our expansion lease, identifying hidden CAM charges and securing TI allowances that saved us $200k in lease negotiations. Their commercial awareness is a massive asset for any Houston developer."
"Stuart Allen handled our acquisition flawlessly, managing everything from the LOI to the final closing. They uncovered critical compliance red flags during due diligence that protected our leadership team from post-close liabilities."
"They resolved our property disputes without costly litigation, utilizing a tactical mediation strategy that protected our equity and reputation. They prioritize practical, cost-effective outcomes over billable hours every time."
"Stuart Allen handled our acquisition flawlessly, managing everything from the LOI to the final closing. They uncovered critical compliance red flags during due diligence that protected our leadership team from post-close liabilities."
In a conventional owner finance, the seller conveys the deed to the buyer at closing and holds a lien against the property as security. In a wraparound transaction, the seller's existing mortgage stays in place and the buyer makes payments to the seller, who continues paying the underlying loan. Wraparounds carry additional complexity and risk, particularly around due-on-sale clauses.
Yes. Texas regulates seller-financed residential transactions through the SAFE Act and related rules, which can limit how many owner-financed loans a seller may make each year and impose disclosure and licensing requirements. The right structure and documentation keep your transaction compliant.
Poorly drafted documents can render a note unenforceable, expose the seller to statutory penalties, cloud the buyer's title, or create disputes over payment terms and default remedies. Precise, compliant documents protect both sides for the life of the loan.
Take the first step toward resolving your business or real estate matter with experienced legal counsel. Contact Stuart Allen Law Firm today to discuss your needs and learn how we can help protect your interests and achieve your goals. We offer initial consultations to understand your situation and provide clear guidance on the best path forward.
1415 Louisiana Street, Unit 1803, Houston, TX 77002
