FOR SALE BY OWNER TRANSACTION

In a For Sale By Owner Transaction or “FSBO”, a Seller sells their home without using a realtor. The Seller advertises the deal themselves and negotiates the terms of the deal directly with the Buyer.

I. Seller’s Responsibilities

From the Seller’s point of view, an FSBO transaction is positive because the Seller does not have to pay a realtors commission. However, the work typically done by the realtor now must be done by the Seller. For example, the Seller must show the home, negotiate with the Buyer, provide access for inspections and final walkthrough, and obtain a smoke detector certificate and certificate of occupancy, if required.

From the Buyer’s perspective it simply means that the Buyer is dealing directly with the Seller during the negotiation process, and that the scheduling of all inspections is done directly with the Seller.

Sometimes, a realtor will show a home that is an FSBO to one of their clients. In these circumstances, it is advisable that the Seller negotiate with that realtor before the home is shown, so that the realtor’s commission is negotiated up front.

II. Contract in an FSBO Transaction

It is custom and practice that the Seller’s Attorney prepares the Contract. We advise Sellers to contact us as soon as the home is placed on the market. Once a Buyer and Seller agree on the terms for the purchase, the Seller should then complete the form entitled “Contract Information Sheet” and fax the completed form to this office so that we can prepare the Contract.

If you are the Buyer, you should give us the name of the Seller’s attorney so that we can follow up and obtain a copy of the Contract.

The attorney prepares and negotiates the Contract after the basic terms of the deal have been established. The attorney also makes sure that the Contract gets executed, and follows up with respect to collecting and tracking the deposits.

Since the Contract in an FSBO transaction is usually prepared by attorneys, there is no requirement that the Contract include an attorney review period. However, many FSBO contracts do contain specific language that calls for an attorney review period. WE ADVISE THAT YOU SHOULD NEVER SIGN A CONTRACT IN AN FSBO DEAL UNTIL YOU HAVE AN ATTORNEY REVIEW THE CONTRACT.

Please call our office at 609.279.0599 or email us at lawoffice@wittlawus.com with any questions or to retain us to represent you in your transaction.