For-Sale-By-Owner and Rent-to-Own are two of the most popular options to explore if you are in the Houston housing market looking to buy a home with owner financing. Sellers trying to get properties off their hands with FSBO or Rent-to-Own agreement are more likely to accept an owner financing arrangement than those who are selling in the conventional way. This is the reason as to why most credit-challenged home buyers browse through endless FSBO and Rent-to-Own listings with the hopes to find a home that they can buy with owner financing in Texas.

While there is a better option than FSBO and Rent-to-Own which we will talk about in a minute, let’s first discuss which one of these two you should explore first if you are looking for an owner financed home:

Rent-to-Own

A Rent-to-Own agreement has many similarities with owner financing. In a Rent-to-Own agreement, you rent a home and commit to buying it at the end of the rental period. The owner usually asks for a down payment at the start of the rental period as a token of your commitment.

The down payment is usually up to 20 percent of the purchase price, so the amount is a lot higher than a typical rental security deposit. On top of your monthly rent, you are required to pay a certain amount of money that is applied towards paying down your sales price.

In an owner financing arrangement, you buy the home immediately and are required to pay a monthly installment to the seller, instead of a conventional lender. The seller assumes the role of a lender and extends a home loan to you.

Rent-to-Own listings are a great place to start when you are looking to buy a home with owner financing in Houston TX or anywhere else for that matter. The reason is that in both the cases, the owner will get a fixed amount of money every month. In most owner financing contracts, you are required to make a balloon payment usually after five years or so. You can also refinance with a conventional mortgage as soon as your credit score improves.

FSBO

Credit-challenged buyers can also approach owners of homes listed for sale without representation of a real estate agent (also called FSBO listings) and ask them if they are interested in selling with owner financing. Most FSBO sellers won’t agree to this, particularly if they are not aware how an owner financing arrangement works. Moreover, most FSBO sellers are desperate home owners who would want the buyer to make full payment on the closing day.

You will need to make a list of FSBO home owners in your target neighborhoods and find out if anyone of them is interested in selling with owner financing. For a regular buyer, it’s a very tough and cumbersome task.

In conclusion

If you have to choose between the two, you should first explore Rent-to-Own listings to find a Houston TX home that the owner is willing to sell with owner financing.

The better option is to buy a home with our TG Global System. With our system, you don’t have to find a home up for sale with owner financing and on top of that, you can buy ANY home you want. An investor from our network will buy your dream home from the owner in the conventional way and then owner finance it to you. Interested in knowing more about our program, click the following link or hit the Get Started Button below: