9 Things To Check In Your For Sale By Owner Contract

Paroma R. is a versatile content writer with a talent for delivering compelling and informative content. She simplifies topics like mortgages, FSBO, listing paperwork, and liens through her writing.

Find Paroma Here

FSBO homes make up around 7% of all sales in the US. These homes sell faster, spending one week median on the market compared to three weeks for agent-assisted sales. FSBO sales are effective but also crucially depend on a solid contract. A well-crafted FSBO contract protects both buyer and seller interests by clearly outlining the contract terms and contingencies. This reduces the risk of cancellations, which affected 15.8% of all home purchase agreements in July 2024. Besides the recent NAR settlement, which makes buyer commissions negotiable, selling as FSBO with a trusted platform can also save you on listing agent fees. So don’t delay – choose a trusted flat-fee company to list as FSBO on the MLS and make the most out of your sale!

What is a For Sale By Owner Contract?

An FSBO contract is a legally binding document to formalize the sale of the house. In a traditional real estate transaction, the seller or buyer’s agent creates the purchase agreement.

However, in an FSBO deal, the seller is responsible for the contract. They must hire a real estate attorney to make the For Sale By Owner Contract legally binding.

The For Sale By Owner agreement protects the rights and interests of both parties to guarantee a smooth process.

What is For Sale By Owner?

FSBO or For Sale By Owner is the process of selling a property without the assistance of a listing agent. Often sellers take this route to save on agent commissions and may use a Flat Fee MLS service.

The average listing and buyer commission is between 2.5% and 3%. This amounts to 5% – 6% of the sale price.

» For Sale By Owner Meaning: Read in-depth about the term “FSBO” to understand its meaning.

Is For Sale By Owner Real Estate Contract Enforceable?

Yes, the contract is enforceable if both parties agree and sign the document. Take the following steps to make the contract legally valid

Who Draws Up Contract For Sale By Owner?

The seller is accountable for drafting the FSBO contract. But a contract written by a common person cannot be considered legal. But, there are two ways to get the FSBO contract that is legally binding:

A dual agent would charge significantly more for their services. Since a transactional agent is not representing either party, they are significantly cheaper.

If you plan to draft the FSBO contract yourself, consider looking at a real estate FSBO contract template online.

9 Must-Have Inclusions in an FSBO Contract

To draft a complete FSBO agreement, it should have a few essential things, they are as follows:

  1. Title of the Contract: The contract’s title defines the document’s purpose. You may name it a ‘Purchase Contract’ or ‘Real Estate Sales Contract’.
  2. Name of Home Seller and Buyer: The document should include the legal names of both the buyer and the seller.
  3. Date of the Contract: The date acts as a deadline for both the buyer and seller to complete their formalities. If any of the parties exceeds the deadline, then they will have to face the penalty.
  4. Property Details: The location, size, and boundaries of the lot should match the tax records. You also have to ensure you do not give any false information about the property.
  5. Payment Terms: Payment terms are critical for any real estate transactions. Explicitly highlight the price expectations, who pays closing costs, and related expenses.
  6. Closing Procedures: Your FSBO contract should include details about the closing procedure such as the closing date, time, and location. In the event of any change in information, the contract must be amended and both parties must sign it.
  7. Signature Block: You have to leave some space at the bottom of each page for all parties i.e., the buyer, seller, and witness to sign the contract. In some states, initials are required on certain sections of the agreement. Check your state requirements and ensure they are met.
  8. Property Disclosures: Legal disclosures are an essential part of your purchase agreement. It is the seller’s responsibility to disclose all information required by law.
  9. Contingency Clauses: Contingencies are contractual rights allowing parties to back out of the agreement safely, without any penalty.

Common Contingencies in an FSBO Contract Are:

For Sale by Owner Contract Template: An Example

For Sale By Owner Contract

State-Wise For Sale By Owner Paperwork

Purchase contracts differ from state to state. Check out what applies to you in your state:

StateFSBO Paperwork
NationwideLead-based paint disclosure | 1099-S tax form
AlabamaAlabama For Sale By Owner Contract | Alabama Seller Disclosure
AlaskaAlaska For Sale By Owner Contract | Purchase Agreement | Alaska Seller Disclosure | Exemption
ArizonaArizona For Sale By Owner Contract | Purchase Agreement | Arizona Seller Disclosure
ArkansasArkansas For Sale By Owner Contract | Purchase Agreement | Seller Disclosure
CaliforniaCalifornia For Sale By Owner Contract | California Seller Disclosure | California Real Estate Transfer Disclosure Statement
ColoradoColorado For Sale By Owner Contract | Purchase Agreement | Colorado Seller Disclosure
ConnecticutConnecticut For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
DelawareDelaware For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
District of ColumbiaDC For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
FloridaFlorida For Sale By Owner Contract | Purchase Agreement | Florida Seller Disclosure
GeorgiaGeorgia For Sale By Owner Contract | Purchase Agreement
HawaiiHawaii For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
IdahoIdaho For Sale By Owner Contract | Purchase Agreement | Idaho Seller Disclosure
IllinoisIllinois For Sale By Owner Contract | Purchase Agreement | Illinois Seller Disclosures | Radon Hazard Disclosure | Radon Testing Guidelines
IndianaIndiana For Sale By Owner Contract | Purchase Agreement | Indiana Seller Disclosure
IowaIowa For Sale By Owner Contract | Purchase Agreement | Seller Disclosures | Radon Fact Sheet
KansasKansas For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
KentuckyKentucky For Sale By Owner Contract | Purchase Agreement | Kentucky Seller Disclosure
LouisianaLouisiana For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
MaineMaine For Sale By Owner Contract | Purchase Agreement | Maine Seller Disclosure
MarylandMaryland For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
MassachuesettsMassachusetts For Sale By Owner Contract | Purchase Agreement | Massachusetts Seller Disclosure | Septic tank Disclosure
MichiganMichigan For Sale By Owner Contract | Purchase Agreement | Michigan Seller Disclosures
MinnesotaMinnesota For Sale By Owner Contract | Purchase Agreement | Minnesota Seller Disclosure
MississippiMississippi For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
MissouriMissouri For Sale By Owner Contract | Purchase Agreement | Missouri Seller Disclosure
MontanaMontana For Sale By Owner Contract | Purchase Agreement | Montana Seller Disclosure
NebraskaNebraska For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
NevadaNevada For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
New HampshireNew Hampshire For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
New JerseyNew Jersey For Sale By Owner Contract | Purchase Agreement | New Jersey Seller Disclosure
New MexicoNew Mexico For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
New YorkNew York State For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
North CarolinaNorth Carolina For Sale By Owner Contract | Purchase Agreement | North Carolina Seller Disclosure
North DakotaNorth Dakota For Sale By Owner Contract | Purchase Agreement | North Dakota Seller Disclosure
OhioOhio For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
OklahomaOklahoma For Sale By Owner Contract | Seller Disclosures | Seller Disclosure Exemption | Seller Disclosure (No known defects)
OregonOregon For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
PennsylvaniaPennsylvania For Sale By Owner Contract | Purchase Agreement | Pennsylvania Seller Disclosures
Rhode IslandRhode island For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
South CarolinaSouth Carolina For Sale By Owner Contract | Purchase Agreement | South Carolina Seller Disclosure
South DakotaSouth Dakota For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
TennesseeTennessee For Sale By Owner Contract | Purchase Agreement | Tennessee Seller Disclosure
TexasTexas For Sale By Owner Contract | Texas Seller Disclosure
UtahUtah For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
VermontVermont For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
VirginiaVirginia For Sale By Owner Contract | Purchase Agreement | Virginia Seller Disclosure
WashingtonWashington For Sale By Owner Contract | Purchase Agreement | Washington Seller Disclosure
West VirginiaWest Virginia For Sale By Owner Contract | Purchase Agreement | Seller Disclosures
WisconsinWisconsin For Sale By Owner Contract | Purchase Agreement | Wisconsin Seller Disclosure
WyomingWyoming For Sale By Owner Contract | Purchase Agreement | Wyoming Seller Disclosure

Final Thoughts

An FSBO contract is a legally enforceable purchase agreement for For Sale By Owner transactions. Unlike traditional home sales, the FSBO agreement is the owner’s responsibility.

The process of putting together the contract can be lengthy and tedious for many. In fact, first-time FSBO sellers may find it overwhelming to handle the task of drawing up a contract themselves. But worry not, there are title companies and real estate attorneys who help FSBO sellers at every step to draft an agreement.

» Paperwork for Selling a House Without a Realtor: Mandatory paperwork that FSBO sellers must know when selling their homes!

How Houzeo Helps FSBO Sellers

Houzeo is a tech-centric FSBO platform for homeowners in America. They provide advanced tools like Showings Management and Offer Management that make a seller’s work easy when selling a home.

With Houzeo, you can consult the right professionals to get assistance to draft the contract properly. We have reviewed & ranked the best FSBO sites that can help on your FSBO voyage.

Reviews: America’s Best FSBO Websites

We’ve reviewed the best paid and free For Sale By Owner Websites in 2023

» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.

Frequently Asked Questions

1. How to write a for sale by owner contract?

You can write a for sale by owner contract by including details such as name of the parties involved, the address of the property, home price, and disclosures.

2. Who draws up contract in for sale by owner?

The seller draws the FSBO contract in the home by owner sale. However, the seller can hire the buyer's agent or a real estate attorney to write it.

3. At what point is for sale by owner house contract binding?

The fsbo purchase agreement becomes legally binding when both parties agree to the terms and sign it with mutual consent.

4. How does a for sale by owner contract work?

An FSBO contract works like the mainstream Real Estate Purchase Agreement. The seller draws the FSBO contract with all the essential elements of an agreement to transfer the ownership of the home to the buyer.

Also Read

Related: house for sale by owner contract, for sale by owner purchase agreement, home for sale by owner contract, real estate contract for sale by owner, home sale by owner contract, real estate contracts for sale by owner, who draws up contract seller or buyer, for sale by owner contracts, home sale contract by owner, contract for selling a house by owner, house sale contract by owner, how to do a fsbo contract.

Related

for sale by owner home contract, sell by owner contract, contract to sell a house by owner, contract for sale of real estate by owner, contract for sale of house by owner, state of ohio for sale by owner contract, fsbo sales contract, selling home by owner contract, real estate sale contract by owner, fsbo real estate contract, contract for selling house by owner, for sale by owner as is contract, owner to owner contract, fsbo contracts, contract to sell property by owner, fsbo agreement, for sale by owner agreement, for sale by owner sales agreement.