What’s Required to Sell a House Without a Realtor?

DISCLAIMER: As a friendly reminder, this blog post is meant to be used for educational purposes, not legal advice. If you need assistance navigating the legalities or requirements attached to selling your home without a Realtor®, HomeLight always encourages you to reach out to your own advisor.

For Sale By Owner (FSBO). Traditionally, only about 7%-8% of homeowners go the solo route in selling their homes. Although the appeal of FSBO lies primarily in saving the cost of paying a listing agent, the amount of paperwork, knowledge, and time necessary to sell a house without a real estate agent can be daunting.

With the help of Lesa Miller, who works with 65% more single-family homes than the average Bloomington, Indiana, agent, we’ll break down some of the steps of selling FSBO, including a list of the legal documents required and an estimate of the time and financial demands you’ll shoulder.

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20 forms and legal documents you’ll need to sell your house

The list of documents required to sell a home FSBO may seem intimidating at first glance, but you probably already have many of the records you’ll need, and other forms are often easy to come by.

This is not an all-inclusive list; it’s an overview of typical documents necessary to sell a house FBSO. While not all of them are legally required, Miller says, “It’s good to have [additional] documents. They protect [the seller] from a lawsuit.” Be sure to check your state laws for any additional documentation and forms that may be required.

  1. Original sales contract. This establishes your ownership, along with details such as purchase price and previous seller disclosures.
  2. Appraisal. Many FSBO sellers will purchase a pre-listing appraisal. A professional appraisal will help determine the listing price based on fair market value. The buyer’s lender will probably require their own appraisal as part of their loan approval process.
  3. Mortgage statement with payoff amount. Contact your lender to get this document to help calculate net proceeds from the sale of your home.
  4. Homeowners Association documents (if applicable). This document explains the covenants, restrictions, rules, bylaws, and dues owed by the homeowner.
  5. Insurance records. This document provides a history of any damages or repairs to your home. Sellers are required to provide disclosure about the condition of the home. Additionally, this will provide the buyer with an indication of the cost of homeowners insurance.
  6. Home maintenance records. Letting the buyer know that you’ve maintained the home can add value.
  7. Capital improvement receipts. Keeping track of capital improvements not only helps the seller at tax time, it also can support the asking price.
  8. Comparative Market Analysis. This report compares recent home sales in your area to help you set the right listing price.
  9. Seller’s Net Sheet. This organizational worksheet helps calculate your net proceeds after deducting the mortgage payoff, taxes, escrow, and any other fees.
  10. Preliminary title report. Doing a title search before you put your home on the market alerts you about any pending taxes, restrictions, or liens on the property that you’ll have to clear before selling.
  11. Mandatory disclosures. In most states, sellers must disclose issues with their homes, such as lead paint, asbestos, water damage, property line disputes, defects with household systems or major appliances, and environmental hazards. For example, Miller says to sell a house built before 1978 requires a lead-based paint disclosure. Check your state’s specific disclosure laws.
  12. Pre-inspection. Getting a pre-listing inspection can facilitate a quicker sale because it eliminates surprises – and gives the seller time to fix major flaws. It’s important to note that there are state laws that can mandate a seller to disclose known issues to buyers, which would include any pre-listing inspection findings that you decide not to correct.
  13. Purchase offer and counter-offer forms. The buyer’s agent will likely provide the purchase offer, but if you want to dicker, be prepared with a counteroffer form.
  14. Purchase agreement. Spell out all the terms of the sale in this contract.
  15. Home inspection report. Even if you did a pre-inspection, the buyer will almost certainly do a home inspection – particularly if there are any inspection contingencies in the offer or if the lender requires it.
  16. Latest tax statement. The buyer needs this in order to calculate the cost of taxes at closing.
  17. Settlement statement. The title company or closing agent will generate this document, which calculates your net proceeds.
  18. Deed. This is the actual written document that transfers ownership of the property.
  19. 1099-S tax form. This applies only if you don’t qualify for capital gains tax exclusion.
  20. 1098. This is a mortgage interest statement that records mortgage interest paid in the previous year for tax purposes.

14 things you’ll need in time, money, and effort to sell your house

In addition to gathering paperwork, be prepared to invest time and money into a FSBO sale. To help you have a successful FSBO sale, we have provided an overview of some of the duties you may be tasked with.

  1. Prepare your home for sale. You’ll need to do this step with or without an agent, but it’s an important one that bears repeating. Deep cleaning and decluttering get you off to a good start. You may also want to paint and make minor repairs. If you hire a cleaner, be prepared to pay $100 to $200, or $25 to $90 per hour.
  2. Add curb appeal. While this could be considered prep, curb appeal deserves its own category. HomeLight’s research indicates that buyers are willing to pay 7% more for a house with great curb appeal versus a home with a neglected exterior. Agents suggest investing an average of approximately $3,467 in curb appeal. That can include everything from little things like fresh plantings and mulched flower beds, sprucing up the mailbox, and changing out the lighting to bigger projects such as fixing the roof or washing the windows.
  3. Consider repairs and upgrades. To ward off home-inspection pitfalls, check off any necessary home repairs. Know what must be fixed in order to complete the sale, and what should be fixed to attract buyers. Weigh the return on investment of upgrades against the price. For example, a finished basement has the potential of up to 75% ROI, but can cost up to $34,000.
  4. Determine the value of your home. You can start with HomeLight’s home value estimator to get a ballpark idea of what your home might be worth, but then most experienced agents will recommend that FSBO sellers get a professional appraisal or a comparative market analysis (CMA), a thorough report that compares your property against similar recently sold properties nearby. Some agents charge $100 to $200 for a CMA; some charge nothing. The average home appraisal costs $313 to $421.
  5. Look for comparables to determine list price. Search for recent home sales in your area with similar size and features to determine your home’s market value. There are several real estate sites you can consult to find comps, or you can check public property records. This task could take a few hours, but it’s important in establishing a competitive price for your home.
  6. Stage it. A HomeLight survey of top agents revealed that 67% report that staged homes sell for 1% to 10% more. Staging differs from decorating in that it is more generic in order to appeal to a broad audience; i.e., depersonalize. If you seek professional guidance, expect to pay between 1% to 5% of the sale price of your home. Typical costs for renting furniture for staging range from $500 to $600 per room per month.
  7. Photograph it. Once your house has been cleaned, decluttered, repaired, and staged, you’ll want high-quality photos of it to attract buyers. If you’re taking the photos yourself, be sure to use a digital camera set on a high resolution and take advantage of natural light. You might get better results by hiring a professional photographer. The national average rate for a real estate photographer is $120.
  8. Write an enticing listing. Photos get a lot of attention, but verbiage tells a story. First, write a catchy title that stands out from other listings. Appeal to the emotions as you highlight unique details and features. Avoid tired words and phrases like “priced to sell” in favor of alluring adjectives. Don’t forget to incorporate SEO to help your ad rank higher in online searches.
  9. List it. You’ll get the widest audience exposure by listing your home on the MLS (multiple listing service). Since only licensed real estate agents can list on the MLS, you’ll have to contract with one to do it for you, or choose one of the paid FSBO websites (flat fee MLS service) that allow you to list your house online. The cost can vary widely, from as little as $200 to $5,000, depending on the services included in the fee. Alternatively, you can get a free FSBO listing on Zillow.
  10. Market it. The MLS listing won’t do all the work for you. Market your home by placing a sign in the yard, posting it on social media, and even mailing postcards – 500 4×6-inch postcards from Vistaprint cost $50 plus postage. You may want to distribute flyers.
  11. Show it off. Without an agent, you’ll be in charge of managing showings and arranging open houses. While you can opt for a lockbox to allow potential buyers in when you’re not home, you’ll want to be available during an open house – and you may want to put up signage directing traffic to your home. To save time, you can set up a Google calendar to book showings. Open houses typically last for a few hours on the weekend. Add prep and cleanup time to your schedule.
  12. Evaluate offers and negotiate. Be sure offers are in writing. You can ask for proof of funds and a mortgage pre-approval letter. Negotiations can be difficult. You don’t want to offend a buyer. Know your goals (fast sale, minimum price) and your leverage (seller’s market, buyer’s market). Decide if you can comply with a buyer’s contingencies. Be aware that you may be dealing with an agent experienced in negotiations.
  13. Stand by for inspection. If the buyer is financing the purchase, they’ll typically want to conduct an inspection. You’ll need to make sure everything is accessible to the inspector. You may want to be there or at least provide receipts for maintenance and repairs done around your home. An inspector primarily looks for major damage and safety issues. Miller says some areas require the seller or seller’s agent to be present at all inspections, but even if not required, she believes it’s a good idea to be present – and that can add several hours to your schedule.
  14. Prepare for closing. Once your home has passed inspection, it’s time to focus on closing or escrow. This process includes a title search, transferring title and utilities, finalizing paperwork, securing funds, and scheduling closing. Because there are so many different state laws governing real estate and so many details that could hold up the process if they’re not absolutely correct, it’s advisable to hire a real estate attorney at this stage. At an average cost of $150 to $350 per hour, or a flat fee range between $1,200 and $3,000, a good attorney is well worth it.

Do you need an attorney to sell your home FSBO?

Some states require a licensed attorney to sell a home. Be sure to find out what your state’s requirements are. Benefits of having a real estate attorney include:

  1. Resolve legal issues. According to the National Association of Realtors, 30% of home sales experience contract delays. These are often problems with titling or financing. An attorney can assist with whatever legal issues arise at closing.
  2. Mediate disputes. Disagreements can arise over contractual confusion. Legal eagles can provide counsel to resolve differences.
  3. Review property title. Although title companies typically conduct these steps, an attorney could also review and draft the title and contracts.

7 mistakes FSBO sellers make and how to avoid them

When selling your home FSBO, here are some common mistakes to avoid so you can keep your sale on track:

  1. Pricing it wrong. Based on the comps and appraisal, price your home at or near Fair Market Value to sell it quickly. Beyond the initial listing price, Miller says, “FSBO sellers don’t know how to manage the price throughout the sale.”
  2. Failing to put it on the MLS. More buyers and their agents will see your home if it’s listed on the MLS. “The MLS is a major tool,” Miller believes, “because it feeds to Zillow and other sites,” where more people will see it.
  3. Failing to market your home. Failure to actively market a home so it stands out to the right buyers is a major pitfall for FSBO sellers. This oversight can lead to a stale listing and fewer proceeds. It can be especially damaging in a shifting market where the buyer pool is smaller and other homes are benefiting from proven strategies used by experienced agents.
  4. Holding out for a better offer. The old real estate adage states that your first offer is usually your buyer. Don’t let that buyer slip away by hoping for a better offer that may never come.
  5. Forgetting the disclosure statement. Failure to disclose or overlooking one of the other legal requirements of the sale can be a dealbreaker and even a seller liability. “The biggest risk is forgetting disclosures,” Miller says.
  6. Failing to follow up on feedback and offers. Miller explains that a good agent will follow up with potential buyers.
  7. Underestimating the time or expense involved in selling FSBO. Costs and responsibilities add up quickly. It can put a lot of pressure on a seller.

4 ways a top agent can save you time and earn you more

If you’re concerned that your time or expertise doesn’t favor FSBO, you can always find a top real estate agent using HomeLight’s free Agent Match platform. If the thought of paying the 3% commission fee rankles, take comfort in NAR’s 2021 data indicating that the median sale for FSBO homes in 2021 was $260,000, as opposed to the median sale of an agent-assisted home at $318,000.

It’s a longstanding pattern. An independent study from 2016 to 2017 revealed that FSBO homes sold for an average of 5.5% less than agent-marketed sales. That difference could more than cover the agent’s commission, and provide you with a much more pleasant home-selling journey.

Other ways an agent can save you time or make more money include:

  1. Marketing. Marketing generally starts with listing your home on the MLS, but it also includes getting good photos, staging, social media campaigns, showings, open houses, creating video walkthroughs, posting notices, and more. Miller says she spends “several hours” preparing a listing to put into the system. Being on the MLS saves time because the agent notes provide additional information, such as disclosures, conditions, and restrictions, that can screen buyers.
  2. Fielding offers and negotiating deals. Real estate agents are experienced at negotiation, which can help you get the price you want or secure the most beneficial timelines or other contingencies.
  3. Pricing it right. Selecting the right listing price can help your home sell quickly. The longer a house sits on the market, the less it will probably sell for. To determine the right number could involve doing a comparative market analysis or getting an appraisal.
  4. Providing resources. Agents often know what repairs need to be made and which upgrades are likely to earn the highest ROI. They can also recommend reliable contacts to perform many of these tasks.

Weigh the pros and cons of a FSBO sale

There’s a lot to do when selling FSBO. Besides pricing research, listing, marketing, showings, and navigating the inspection and appraisal, the paperwork alone can be daunting.

According to NAR’s 2020 report, 10% of FSBO sellers rated ‘understanding and performing paperwork’ as the most difficult task in the home sale. Other tasks – such as prep, getting photos, fielding offers, and negotiating with buyers – can be time-consuming as well as costly.

HomeLight’s data indicates that the top 5% of real estate agents sell homes for as much as 10% more than the average agent. If you’d like to explore your options and consult with an experienced agent in your area, check out our Agent Match tool and reduce your workload. HomeLight analyzes millions of transactions to find top agents who sell homes faster and for more money than others in your area. In just two minutes, you can find an industry expert to help you sell your home.

As Miller summarizes, “Agents give [your home] so much more exposure.”

Header Image Source: (Feverpitch / Deposit Photos)

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