Listing a house for sale by owner (FSBO) is when the homeowner declines to hire a realtor to manage the transaction on their behalf. This allows homeowners to save on real estate agent fees but also means they assume more of the administrative duties of selling a house. At the top of this list of duties is knowing the documents you need to sell your house by yourself.
Not having the right paperwork for selling a house by yourself can jeopardize the sale and lead to other errors that may be costly to fix. This guide reviews the legal documents most commonly needed for selling a house, explains their purpose, and provides other important information for homeowners to consider.
Essential Documents for Selling a House Without a Realtor
1. Residential Property Disclosure Form
Most states require sellers to complete and sign a residential property disclosure form when selling their home. The disclosure form serves as a baseline of information about the property. It contains a series of factual statements and questions that the homeowner must answer. A seller’s responses on a disclosure form usually indicate their confirmation, denial, or uncertainty about the disclosure.
Some examples of common disclosures a seller may have to provide could include the following:
- The seller has the legal authority to sell the house
- The existence of any easements, boundary disputes, or other restrictions around the use of the property
- Whether the property has any known defects
- Whether the property is subject to a homeowner’s association or another common group
Each state may have its own variations of the disclosure form — with the potential for unique questions — that a seller must provide to a prospective buyer. Responding to all items on the disclosure form is essential for a smooth transaction.
Misrepresentations and other incorrect responses could result in a delay or termination of the sale or legal claims.
2. Purchase Agreement
The purchase agreement is the next major legal document required to sell a house. This is a written contract entered into between the seller and buyer. It states the key terms of the home sale and operates as the legal vehicle for administering the transaction. A purchase agreement generally contains identifying information about the parties and the property being sold.
A residential real estate purchase agreement typically outlines the sale’s key terms, starting with the purchase price. It may include contingencies for financing approval and a satisfactory inspection report. The contract specifies the closing date, inspection period, and conveyance methods, along with any other essential conditions or contingencies for the sale.
Homeowners can use our state-specific sale and purchase agreement forms to draft an agreement for their transaction.
A real estate purchase agreement addendum form may also be necessary to modify the terms of the original agreement pre- or post-closing.
3. Title Report and Deed
The paperwork for selling a house by the owner includes a title report and deed. The title report confirms the owner’s clear title and checks for any issues, like mortgages, that could affect the sale.
Home sellers typically work with a title company for this. If problems are found, they can be resolved with the title company’s help, ensuring the transfer is smooth. The real estate deed, varying by state, legally transfers ownership and is recorded with local government, listing the buyer, seller, and property details.
4. Loan Documents
When selling a home with an existing mortgage, it’s crucial to address paying off the current loan and understanding the terms outlined in the original loan agreement. This agreement will often detail specific steps or requirements for early payoff, which could include prepayment penalties or specific notification procedures.
Reviewing your loan agreement early in the process can help ensure a smoother transaction. It allows you to account for any obligations or conditions that must be met to fully satisfy the terms of your mortgage during the sale. It’s a good idea to consult with the lender or a legal professional to fully understand these details and how they might impact the sale and the final payoff amount.
5. Latest Utility and Property Tax Bills
Including recent utility and property tax bills when selling a house without a realtor adds transparency for the potential buyer. These documents prove you’re up-to-date on payments and reveal any liens due to unpaid debts, which buyers usually prefer to avoid as they can affect property rights and future saleability.
Additionally, these records give buyers insight into the ongoing costs of owning the home and facilitate any needed expense prorations at closing.
6. Homeowners Association (HOA) Documents
Some residential real estate is subject to the terms of a homeowners association (HOA). An HOA sets standards and rules around decisions related to the homes within it. Key issues that the HOA may address include:
- Rental restrictions
- Design choices for exterior elements of the property
- Maintenance of any community spaces
Most HOAs require homeowners to pay dues covering the association’s management and costs. A buyer will generally have to agree to join the HOA as part of the purchase, which requires the seller to provide related paperwork to sell the house.
The necessary HOA documents could vary in name and form but will generally include the following:
- An HOA agreement
- An invoice for HOA dues
- An agreement outlining the rules under the HOA, which are sometimes referred to as covenants, conditions, and restrictions (CC&Rs)
If a homeowner doesn’t have copies of these documents from when they purchased the property, they can contact the HOA’s representatives or management group to obtain the most recent copies.
7. Property Survey
A property survey is another document a buyer may request as part of the home sale. It confirms the boundaries in the legal description of the deed and identifies other notable elements of the land, such as capital improvements, fence lines, and other landmarks.
A buyer may request a property survey to confirm there are no current infringements on the rights to the property they are purchasing. For example, a survey may identify a fence encroaching on the property’s boundary. The parties to a house sale can often hire a company to survey the land if one has not been performed recently.
8. Certificate of Occupancy
A certificate of occupancy is a legal document issued by the local government’s building or zoning department to confirm that the property meets the requirements under applicable building codes and assure residents that the property is safe to inhabit.
Each locality will have its own rules and process for obtaining a certificate of occupancy as part of the paperwork for selling a house. The seller can contact their local building department to determine the necessary process, which may include an inspection and payment of fees to issue the certificate.
9. Plans and Permits
The plans and permits related to the property being sold are tied to the certificate of occupancy. These documents should detail the original blueprints, build dates, surveys, and other permits associated with the property.
A seller can often obtain these documents through their local building department. Buyers will want these documents to identify any changes or additions to the property and its improvements since the original build. If additions were made without proper permitting, code violations may need to be resolved before finalizing the sale.
10. Receipts and Warranties
Copies of receipts and warranties related to improvements and appliances that will transfer with the house sale can help ensure a smooth transaction when selling property on your own. Receipts from contractors for recent improvements may help justify the requested purchase price and confirm the value transferred to the buyer.
Additionally, transferable warranties may exist for common fixtures the buyer will receive, such as a water heater or kitchen appliances. These records are valuable to the buyer in case of a defect or problem with the item covered under warranty, potentially limiting the future owner’s out-of-pocket expenses.
Prepare Your Paperwork
Organizing Your Documents
Organizing the paperwork for selling a house by owner is the next step after determining the documents needed before, during, and after the sale. Create a checklist of the paperwork to help you stay organized.
The checklist should include:
- The name of the document
- Who issues it
- Who needs to sign it
- When the seller should provide it during the transaction
After gathering the required documents, make copies readily available for potential buyers to review. Securely store any original documents and an extra set of copies in a hazard-proof filing cabinet or safe.
Consulting with Professionals
Selling residential real estate involves complex paperwork, understanding local laws, and handling buyer-seller issues. For those considering For Sale By Owner (FSBO), it’s key to know when to seek professional help for challenges like title disputes or property defects.
Basic selling forms can often be found through local government resources, but for more complex issues, consulting a real estate attorney or an FSBO service could offer cost-effective alternatives to traditional realtor fees.
Tips for Selling Your House Yourself
Assessing Your Home’s Value
Before listing a house FSBO, it’s important to properly assess the home’s value and determine a competitive sale price to attract potential buyers. Conducting a comparative market analysis (CMA) is best practice for obtaining a sense of the home’s potential value.
Real estate agents have experience and access to tools for performing a CMA, and homeowners who sell their property on their own will need to conduct this research themselves.
To conduct a CMA:
- Look at recent sales of comparable homes within your geographic area to determine current market value.
- Identify recently sold homes with similar build dates, square footage, lot size, bedrooms, bathrooms, and other features to develop a rough estimate of value.
- Consider any distinguishing features, such as upgraded finishes or more square footage, to justify listing the property above or below the available comps.
Homeowners can find relevant data for their CMA by searching real estate databases like Zillow, Redfin, and the MLS. However, it’s crucial to use these databases carefully, as a recent MLS lawsuit argued that the system may have led to artificially inflated real estate commissions, potentially affecting property prices and investor returns.
Marketing Your Home
After determining the listing price for the home, a seller’s next step is to market the property to reach a wide audience of possible buyers. Most sellers use online platforms to list their homes, some of which may be free or charge a listing fee.
Creating a compelling listing is essential for attracting quality buyers and driving interest in the property. The home’s description should include desired features or amenities that prospective homebuyers will value. High-quality photos that accurately reflect the home should support the description.
Some tips for taking high-quality photos include:
- Use a quality camera with high resolution and megapixels.
- Incorporate as much natural lighting as possible to brighten the photos.
- Clean and stage the home to create visually appealing photos.
- Take photos from a variety of angles and perspectives to fully capture the feel of the space.
Once the house is listed, consider posting a sign in the yard to notify others in the area that the home is for sale. Hosting one or more open houses is an opportunity to give potential buyers a closer look at the property and to provide additional information not captured in the listing description.
Negotiating and Closing the Sale
Selling a home FSBO involves handling offers, negotiation, and closing. Without a realtor, the seller evaluates offers and manages conditions or contingencies.
It’s crucial to know your goals and non-negotiables before negotiating. Don’t rush decisions; take time to assess risks and maybe counter-offer. Upon agreement, use a document checklist to finalize the sale.
Pros and Cons of Selling Without a Realtor
Pros
- Savings on Realtor Fees: One of the main advantages of selling a house without a realtor is avoiding the costs associated with realtor fees. These fees are typically a percentage of the home’s sale price, and by bypassing a realtor, a seller can save a significant amount of money.
- Direct Control Over the Sale: Sellers have direct control over all aspects of the sale process, from setting the asking price to scheduling viewings and negotiations. This could lead to a more personalized selling experience.
- Flexibility in Negotiations: Without the intermediary of a realtor, sellers may find more room to negotiate directly with buyers, potentially leading to quicker agreements.
- Full Attention to Your Sale: Handling the sale by yourself means you can focus solely on your transaction without the concern that a realtor is juggling multiple clients and sales.
Cons
- Increased Responsibility: Selling without a realtor means taking on all the responsibilities they would typically handle, including marketing the home, coordinating showings, negotiating with buyers, and handling paperwork.
- Need for Real Estate Knowledge: Sellers need to have or acquire knowledge of the real estate process, including understanding necessary paperwork, legal requirements, and market trends, to handle the sale effectively.
- Potential for Lower Visibility: A realtor can list a home on the Multiple Listing Service (MLS), which gives it wide exposure. Selling on your own might limit the home’s visibility to potential buyers.
- Legal and Financial Risks: Misunderstandings or errors in the paperwork and process can lead to legal or financial repercussions. Realtors typically help navigate these complexities to avoid potential issues.
