Selling a Home by Owner – FSBO:
This is when you try to sell a home without a realtor, “for sale by owner,” or FSBO,
pronounced fizzbo. You may save the real estate commission but you will have to analyze the
market, decide on a price, advertise and show the house, draft an agreement and negotiate
with buyers, all on your own.
Buying a FSBO is different than buying with a real estate broker involved. You will personally
have to research a fair value/price, negotiate with the seller and review or draft an offer to
It is more critical to have the help of an attorney in the FSBO buying and/or selling process. The attorney can suggest appropriate contingencies, draft and review documents and guide you through each step of the transaction.
Buying a Home – Make an Offer:
When you have found the home you want, it is time to write up a formal purchase offer and
sign a real estate purchase and sale contract.
You and the seller must sign a legally binding contract. However, the contract can include
contingencies such as a property inspection, appraisal, loan approval and title report review
and approval. Contingencies enable a party to opt out of the transaction if a contingency is not
A seller may respond to a buyer’s offer by accepting it, rejecting it, or making a counteroffer
presenting different terms for the sale.
Don’t forget Title Insurance:
You must make sure the seller has good title to the property. Basic title insurance protects you against defects of record in the seller’s title. The title insurance company researches public records and issues a title insurance commitment stating information about the title. For
example, who owns the property? Are there any easements or restrictions on the use of the
property? Are there any liens that should be paid off at or before the closing? All of these
matters may seriously affect the value and your use of the property. Some of these matters
may require an attorney’s expertise to review, resolve and/or make it clear to you the title that is being conveyed to you.
Sellers are legally required to provide buyers with certain disclosures. Sellers must disclose any known issues that might affect the property’s value or habitability.
The closing should happen with an escrow officer at a title company. Sometimes the buyer and seller don’t meet at the closing. Each can go in to sign their closing documents separately or they sign electronically. Some signatures will have to be notarized so bring a photo I.D.
Prior to the closing date, get the closing statement and a copy of the documents to review. It is wise to have an attorney do this and answer any questions you may have. Attorneys can see potential problems and offer a solution before the closing date. The closing statement details closing fund amounts and who pays what. Funds can be wired or paid with a cashier’s check on the closing date.
After the closing, the deed is recorded with the County Recorder for the county in which the
property is located. Once the deed id recorded in the buyer’s name, it is delivered to the buyer.
The buyer should also receive the title insurance policy contemplated by the title insurance
commitment. An attorney should review these documents for legal accuracy and compliance.
Find out how Sylvester Law can provide you with affordable legal services.