owner financing raw land

We’re selling some raw land (Texas), no house on it, and the buyers want to put 40% down and have us owner-finance the rest. I can see on other postings that the recommended legal docs to use are no longer a ‘contract for deed’, but rather:
Warranty deed with vendors lien
Real estate lien note
Deed of trust
Is this really necessary for such a small amount? It seems like overkill. The financed portion would be about 25-30k. Is there another route we can go without hiring a lawyer to draw these up?

Hi -

Simply put, the laws have changed so as to no longer favor CFDs (contracts for deeds). The changes have placed most of the burden for the transaction on the Seller and with that burden comes many responsibilities.

Ignoring those responsibilities (to the Buyer) can cost you money – real money. A lot of it.

DOTs (deeds of trust) have some real benefits, not to mention they’re viewed somewhat more favorably by both courts and juries.

Don’t be penny wise and dollar foolish here. If the transaction is as simple as you make it out to be then the legal paperwork won’t be that expensive. Think of it as cheap insurance.

Take care,

Eric C

Thanks for the advice, you’re right of course. If the deal goes through, I’ll do it right.

It’s my understanding that Non-residental land in TX can be sold with a contract for deed and doesn’t fall under the new laws if the land is more than 10 acres.

I’m not familiar with the laws and customs in TX. However, in PA, when an owner takes back a mortgage in a land deal, typically the buyer’s lender will require the seller mortgage to be subordinated to the 1st mortgage. So, in other words, you’d be in second position in lien priority. You may want to think about that.

I agree with the prior poster–get yourself a RE attorney.

Howdy Jaynine-Tx:

You are making too big a deal out of the paper work. There are forms all over the net and book stores to fill out your own deed and note and deed of trust. For less than 50 bucks you can do it yourself. I have done hundreds for myself and others. I could not charge then for legal advice but I helped them fill in the blanks on the forms.


The deal didn’t go through, so it’s a moot point anyway. I agree, the paperwork is not that big a deal, so if we get another buyer wanting the same kind of deal, we’ll figure it out and do it right.
Thanks for everybody’s input.