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12 min read Nov 28, 2022

How to Create a For Sale by Owner Contract (2022 Update)

Cover - For Sale By Owner Contract

Selling a house by owner is tricky and requires a lot of patience and extensive paperwork. Home sellers choose FSBO because it helps save money on listing agents’ commissions.

To ensure a successful FSBO home sale, you must be mindful of getting the listing paperwork right. Here’s a detailed guide on drawing up a For Sale By Owner Contract.

What is a For Sale By Owner Contract?

An FSBO contract is a legitimate document. It contains information to safeguard your legal rights.

Home sellers choose a sell-by-owner arrangement to avoid hiring a real estate agent and save on the 6% real estate commissions.

In 2022’s slowing real estate market, FSBO is trending more than ever!

What Does for Sale By Owner Mean?

For Sale By Owner simply means selling your home yourself. When selling FSBO, the home seller is tasked with all the listing agent’s responsibilities.

This means that FSBO marketing, prospecting, negotiating, and closing—everything related to the FSBO sale happens at the pace of the homeowner. A listing agent’s primary role is to get the property listed on the MLS.

» Selling a House: Check out the 7 steps to selling a house in America.

Who Writes the FSBO Contract?

In a conventional house sale, the seller’s realtor or agent would prepare the papers and assist with the negotiations. If you’re selling your property alone, you might be curious about the procedure.

Once you start receiving buyer’s offers, offer negotiations begin, and the contract is drawn up. Usually, a real estate attorney does it.

1. The Buyer’s Agent

You can also choose the buyer’s agent to act as your agent. A transactional agent does the task for you. They are also known as “Dual Agents.” In this scenario, the realtor agent will act as a third-party person and will not negotiate for either of the parties.

If you choose to do so, the cost of drawing up the paperwork will be added when closing the sale. There might be a chance that the real estate agent commission would land on your plate, so make sure you ask to split the cost in the initial stage itself. However, few states prohibit the Dual Agent concept.

2. A Real Estate Attorney

Hiring a real estate attorney can be an option for drafting a For Sale By Owner contract. Having an attorney by your side can be helpful. They would provide professional guidance and ensure that the contract is legally binding for both parties.

A real estate attorney charges around $150 to $300 an hour.

» Real Estate Attorney: Learn the role of a real estate attorney in a home sale

3. A Limited-Service Listing Agent

A limited-service real estate agent is cheaper than a traditional agent. They provide limited services at lower costs, but most of the property owners do not go in for this option. With a limited-service real estate agent, you will spend more than saving as you will handle most of the tasks yourself.

4. The Home Seller

Many property owners are unaware of the starting point for drafting an FSBO contract. Many sellers search online for contract templates.

Drafting a For Sale By Owner Contract yourself can be difficult as many states require a realtor to draw up the contract. Title companies and escrow companies provide different FSBO contract templates made per different state laws.

What’s Included in Your Home For Sale Contract?

Selling a house without a realtor means looking into all the details yourself. This means that from listing your home on MLS till the closing date, drawing up the contract is a part of it. Most home sellers aren’t familiar with this document and its inclusions.

» Sell Your House Without A Realtor: Steps to Selling Your Home Yourself

# NoFSBO Contract InclusionsDescription
1Contract TitleHighlights purpose of the FSBO document
2Names of Home Seller & BuyerMentions full names of both parties
3Contract DateContains the date of execution
4Property DetailsShows FSBO property location, description, etc
5Payment TermsExplains the terms of payment in full
6Method of PaymentSpecifies the mode of payment of both parties
7ContingenciesTimeline and conditions of the event
8Closing DateDetails of the closing date, location, time, and place
9Signature BlockSpace at the end to place the names and signatures
10Property DisclosuresDiscloses all the material facts

1. Contract Title

Every document requires a title given to it explaining what the document intends to deliver. You can simply name it “Real Estate Contract.”

2. Names of Home Seller & Buyer

Add the full names of the parties to the contract. Later, you can refer to them as buyer and seller in the contract.

3. Contract Date

The FSBO contract shall mention the date of execution. The contract also specifies further dates by which both owners must proceed with the sale. In some FSBO contracts, there are fines for missing deadlines.

4. Property Address & Description

This is the most crucial part of drafting the contract. You need to be specific with the details of your property. Mentioning the entire property address is very important, and its legal description should be added. Now, you must start specifying the appliances you wish to carry with you or plan to leave them as is. Be as specific as possible. Do consider the below points.

  • Appliances include a refrigerator, washer, dryer, toaster, etc.
  • Home Decor includes decorative items such as wall art, figurines, table accents, etc.
  • Furniture includes closet doors, shelves, sofa sets, etc.
  • Any kind of yard or garden fixtures.

5. Terms for Payment

Because purchasing a home is a big investment, funding and payment shouldn’t be left up to chance. The buyer and seller should be transparent about their financial situation and clearly convey their expectations. Explain the terms of payment in full. You should include the following in your payment terms:

  • Purchase price of the house
  • Earnest money deposit
  • Payment of the remaining amount
  • Property taxes
  • HOA fee and payment rate for the current year

6. Method of Payment

The For Sale By Owner Contract contains the entire amount payable for the real estate property (the amount payable excludes the earnest money deposit). At times, the buyer is expected to make full payment towards the home sale. Otherwise, the buyer may enter into a contract stating the amount for monthly installments for the home value.

7. Contingencies

In essence, a contingency clause allows parties in the FSBO contract the option to back out from the contract under specific future conditions that must be agreed upon by the buyer and seller. There are some common contingencies to the FSBO contract:

💲 Financing Contingency: This contingency clause gives the buyer the right to back out of the contract on failure to obtain financing within the specified time.

However, if the buyer fails to get a mortgage from the lender, he is supposed to inform the seller within that time. Failure to do so will make the buyer liable under the contract to purchase.

🕵️‍♂️ Inspection Contingency: The buyer gets your home inspected by a professional home inspector within a specified timeline. If the inspector reports any major defects in his report, then the buyer may ask you to repair them, or they might even terminate the contract.

🏡 Home Sale Contingency: A home sale contingency gives the buyer a specified time for selling their previous house to raise funds for the new property. This clause protects the buyer. If their house doesn’t sell for their asked price, the buyer can back out from the contract without breaching the contract terms.

💯 Appraisal Contingency: If the seller’s property is not appraised for the minimum specified amount, this condition safeguards the buyer. The buyer reserves the right to terminate the agreement; on rare occasions; even the earnest money is refunded.

The contingency clause contains a timeline and conditions as to the event of a contract. If the buyer fails to inform the seller about the appraisal report within the given time frame, then the buyer has to buy the property at a price initially agreed by both parties.

8. Closing Date & Procedures

The house for sale by owner contract is completed when it contains all the details of the closing procedure. The details related to the closing date, location, time, and place have to be mentioned. This acts like a deadline for the buyer to keep their finances ready. Changes in the closing details must be made by making amendments to the contract and filing it along with the remaining paperwork.

9. Signature Block

Leave space at the end of the contract to place the seller and buyer’s names and signatures. Make sure to review your state laws to cover all bases in your FSBO contract.

10. Property Disclosures

This is also an important part of your For Sale By Owner Contract. The seller must disclose any issues the property might have that may adversely affect the property’s market value. If you fail to disclose any material defects in your property, chances are that you may face lawsuits in the future. Some states also provide a standardized disclosure form.

» Seller’s Disclosure: What Home Sellers Need To Disclose

State-Wise For Sale By Owner Paperwork

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

If you can’t find free stuff, there are paid options like USLegal. Many legal forms, such as tax records, property surveys, and deeds, are usually found through local or state government offices, such as your tax assessor’s office or the department of revenue.

Is a For Sale By Owner Contract Legally Binding?

Yes, of course!

For Sale By Owner Contract is a legally binding agreement between the buyer and seller. Selling your home can get overwhelming at times. Because in an owner-to-owner sale, you have to do everything yourself. The things a realtor does are:

  • List on MLS
  • Arrange an open house
  • Schedule showings
  • Negotiate buyers’ offers
  • Draw up the contract

With the help of a professional, it becomes easier for the buyer and seller to deal with the contract and its contingencies. They help with the negotiations and often provide the best price for the house.

A home sale is a complicated process, and it requires a lot of paperwork to be done. It is essential to have a contract to make this sale legally binding for both parties.

» FSBO Paperwork: Understand the paperwork required for Selling a House Without a Realtor

Alternatives to FSBO Contract

If you feel that the listing paperwork is quite complex, you can consider high-tech, Online For Sale By Owner websites like Houzeo.com & finish the listing formalities in 60 minutes.

    🎯 Houzeo Helps You Create Your FSBO Contract Effortlessly


    Houzeo is the best alternative for you to complete the FSBO paperwork, from listing on the MLS, to seller disclosures, and closing.

      💲 List your property with Houzeo’s Freemium Plan

      💲 Purchase the “Contract to Close Upgrade Package”. A Licensed broker will review your paperwork to make sure it is appropriate.

      In addition, you should also have the settlement agent review the paperwork so you cover all bases. Houzeo takes FSBO to the next level with its innovative technology.

    » More: Start your FREE listing NOW!

Interesting Facts about For Sale By Owner Contract

FSBO contract can be written on a blank A4 size sheet of paper or legal paper, or even a handkerchief! It can be handwritten or printed. Everything works if all the terms are highlighted, and the contract is duly dated and signed by both parties.

Here’s a sample handwritten FSBO Purchase Agreement:

For Sale By Owner Contract

Checkout the Best For Sale By Owner Websites

We have summarized the best paid and free FSBO sites for you.

Reviews: America’s Best FSBO Websites

We’ve reviewed the best paid and free For Sale By Owner Websites in 2022

Frequently Asked Questions

1. How do I write a For Sale by Owner Contract?

1. Enter the basic information in your contract
2. Decide the payment terms
3. Disclose the material facts relating to the property
4. State the closing procedure and closing costs

2. Who writes a contract when selling a house?

The buyer's agent or a real estate attorney typically writes the contract.

3. At what point is a For Sale by Owner contract legally binding?

The For Sale by Owner contract is legally binding when the buyer and seller agree upon the sale price and duly sign the contract.

Recommended for Selling a House

  • How to Sell My House Fast: Selling a house in America takes approximately 90 days from the list to close. And that’s only if you get offers fast and there are no hiccups in home inspection, appraisal, and closing. Here’s how you can sell your house fast and for more cash.
  • Closing Costs: What are the closing costs on a house? See how it varies for a seller and a buyer.
    • Closing Costs for Sellers: What are the closing costs as a seller? See the real cost and how you can negotiate your closing costs as a seller.
    • Closing Costs for Buyers: Check out real costs related to buying a house and see if you can negotiate in your closing costs as a buyer.
  • Best Real Estate Websites: The majority of homebuyers and home sellers go through a real estate website before reaching out to a realtor. Read our list of the top 12 real state websites in the USA.
  • Best Real Estate Companies: Some real estate companies offer thousands in savings for home sellers, others offer thousands in rebates to home buyers. Check the top real estate companies in the USA.
  • Seller Disclosures: Real estate laws require home sellers to disclose certain things when selling their homes. Read our blog to find out the details!
  • How to List on MLS: The fastest way to list on MLS!

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