REAL ESTATE LAW
For Sale By Owner
When a property owner sells a property on their own without a real estate agent or a broker, it is commonly referred to as a “For Sale By Owner” (FSBO) transaction. There may be a few different reasons a homeowner may choose to sell a home on their own, but most commonly, it is to save on real estate commissions, which can run from 4% – 6% of the real estate sales price.
Often, homeowners contact a real estate attorney because they are selling their home to a friend, family member, or tenant, and therefore they do not want to pay a real estate commission since the seller already has a buyer ready to purchase their property and there is no need for a real estate agent to market the property to find potential buyers.
If you are considering selling your home without using a real estate agent or broker, it is critical that you obtain the assistance of an experienced For Sale By Owner (FSBO) attorney to ensure the sale is conducted in compliance with all California real estate laws.
Why You Need a Real Estate Attorney in a For Sale By Owner (FSBO) Transaction
For most people, a home is the most expensive asset they will ever buy or sell. More and more individuals are choosing to sell their home on their own to save the money they would spend on real estate commissions. Although a FSBO transaction may seem relatively easy, it is a complex transaction that comes with significant risk exposure. There are many legal issues involved in a real estate transaction, including but not limited to certain clauses in purchase and sale contracts, contingencies, mandatory seller disclosures and regulations.
Failure to seek the legal counsel of an experienced real estate attorney can lead to major liability issues and potential litigation caused by mistakes or omissions during the selling process. Therefore, the guidance of an experienced FSBO attorney should be sought to ensure you are legally protected.
Can I Post For Sale By Owner (FSBO) On MLS?
A variety of companies offer “flat fee” multiple listing services (MLS). However, you must be careful and ensure you fully understand what your true fees will be because after you have listed your home on MLS, you will be contractually obligated to pay a commission to the buyer’s agent. This may not be apparent from a flat fee MLS advertisement, but such a fee can be between 2%-3% of the sales price.
Why People Choose An Experienced FSBO Attorney
Often, homeowners come across our real estate law firm because they are searching for an experienced For Sale By Owner lawyer. For many homeowners, it is advisable to list a home for sale with a highly qualified real estate agent or broker so the home can be marketed to as many qualified buyers as possible. However, there are situations where a FSBO transaction is appropriate and can potentially save a real estate seller tens of thousands of dollars. The following are just some examples of when a homeowner retains our law firm for assistance with a FSBO transaction.
- Owner is selling the property to a tenant.
- Owner is selling the property to a friend or a family member.
- Owner has marketed the property themselves and has found a buyer.
- Owner has been solicited to sell the property to a real estate investor.
- A Buyer has found an off-market home to purchase without a real estate agent.
What Can An FSBO Attorney Do For Me?
Generally, an FSBO attorney can oversee and manage the entire sales process from drafting the initial Residential Purchase Agreement and Joint Escrow Instructions (CAR RPA) to title review and ensuring a smooth closing. In particular, the following are examples of some of the things an FSBO attorney can do for you:
- Prepare all documents for sale of the property, including the purchase agreement and escrow instructions, addendums, counter offers, acceptance, rejections, contingency removals, and notices to perform.
- Provide legal advice and legal review during the entire sales process.
- Keep track of all contingencies and ensure they are timely satisfied or waived.
- Open escrow and coordinate with the escrow and title company.
- Ensure a preliminary title report is ordered.
- Review preliminary title report for title matters that may need to be cleared.
- Provide required disclosures.
- Help seller prepare and provide all mandatory seller disclosures.
- Ensure the seller follows its legally required obligations and minimize the seller’s liability exposure.
- Coordinate with lenders that may be involved in the transaction.
- Request and review estimated seller and buyer closing statements.
- Review inspection reports if needed.
- Coordinating final signings and ensuring a smooth closing.