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Owner financed home to buyers now they want money back. Did not go thru lawyer just typed up a contract what can I do?

San Benito, TX |

Contract signed by all parties and notarized. They fell behind three months and that was payment for three months and they in default.

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Attorney answers 4


This is going to be difficult to discuss without more transaction specific details. I think it would be a good idea to have a real estate lawyer in your area take a look at what you did with the contract you made up. You should be careful here, there are certain types of "owner financed" type real estate transactions that, if created (which can happen unintentionally) in Texas, can very risky for the seller due to statutory penalties associated with failure to perform certain duties within the transaction. You always have to be aware that If your buyers are pushed into a corner, they may push back... if you've got an exposure it can go sideways quickly. Get some solid advice before proceeding.

The above comments are made by an attorney at The Rieck Law Firm (RLF). RLF offers free initial consultation to potential clients and more information about this firm can be found at Materials contained within this website and submitted by this user (including the above comments) provide information on general legal issues and are not intended to provide advice on any specific legal matter. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet and online readers should not act upon this information without seeking professional counsel.


What you can do will be dictated by what the contract states.

If it is a mortgage, you may foreclose.

If it is not a mortgage, then you would have to sue for breach of contract.

I am not a TX attorney, laws vary from state to state, therefore you should always consult a local attorney.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.


You really need to hire an attorney. Owner finance deals on residential property are tricky these days. You have the Federal SAFE Act, Texas SAFE Act, and Dodd-Frank with which to contend.

The above statements are provided as general information and not intended as legal advice. Each matter has its own set of unique circumstances that cannot be adequately addressed without consultation. You are strongly advised to hire an attorney licensed to practice law in your state to represent you.


The other attorneys are correct, it is more difficult than ever to have an owner financed transaction without involving a residential mortgage loan originator and a title company. The penalties for not doing the transaction right are almost always borne unto the sellers in the transaction. You will need to go see a real estate attorney to review your documents and determine your rights.

If this response was helpful, please mark it as helpful or as a best answer. The response provided herein is for informational purposes only and is not intended as legal advice, nor does it establish or intend to establish an attorney-client relationship. You should always speak with a licensed attorney regarding your legal rights before taking or not taking any particular action.