For Sale by Owner (FSBO) Process

or Sale by Owner (FSBO) Typical Process

In typical For Sale by Owner (FSBO) transactions, the For Sale by Owner (FSBO) process generally goes like this:

• The home is prepared for sale (repairs made, inspections ordered if necessary). Price is determined. House details are confirmed. Marketing materials and visuals if any are ordered and made. A sign is ordered and installed, etc.  The home is staged for showing.
• The seller(s) hire me to assist them through the process if they haven’t already prior to preparing the house for sale, in order to facilitate a smooth transaction and help protect them from liability.
• A home is listed as an FSBO on any variety of websites or in print (less likely these days).
• Buyers or their agents contact the seller to coordinate showing times and instructions. Open houses are announced and held.
• The home is shown, questions are answered.
• An offer or multiple offers are made and received by the seller, thus starting critical timelines for accepting or or rejection of the terms.
• Crucial terms and timelines are negotiated including allocation of closing costs and determination of buyer’s ability to buy and perform (very critical part!), as well as any details about the property condition (i.e., any needed pre-sale repairs) and any fixtures (i.e., home appliances, drapes, sheds, etc.) that come with the property.
• Counter-offers are made back and forth depending on number and strength of offers
• The offer and counter-offers if any are finalized and duly executed by both parties. Timelines to perform per the purchase agreement are set and should be calendered to adhere to and give notice to the other party if they are not being adhered to.
• Escrow is opened with the title company; the buyer’s earnest money deposit is deposited.
• The title company runs reports on chain of title, clear title and an offer of insurance if so, liens on the property, orders the preliminary title report and sends it to the seller (but they typically won’t review it or point out any issues that will be the sellers responsibility). I have seen many sales killed by unreviewed preliminary title reports at the very end of the transaction when buyer/seller has already relied on the home actually selling.
• An estimated closing statement is prepared going off of what is known at the time and the purchase contact and any counter-offers or addenda.
• The buyer’s lender starts on the buyer’s loan
• The appraisal is ordered and will be performed by someone who typically comes out to the house and does an interior and exterior analysis of the condition of the property and the comparable sales data for the neighborhood
• Inspections are ordered depending on what the buyer’s lender requires and what the buyer wants. Real Estate Transfer Disclosure Statement (TDS), Termite Inspection Report,  Natural Hazard Zone Disclosure Report (NHD), any Sewage/Septic Report, any Well Inspection and Water Potability Report, any pest reports, any roof inspections, any AC/Central heat inspections, property inspections, etc.
• Appraisal and Inspection reports come back, possibly with issues that affect the price to be paid, or the buyers getting the loan they need to buy the house.
• The buyer’s lender communicates to the seller what may be wrong with the house, what is required to be fixed for the buyer to get the loan. Possibly the buyer through their agent submits a request for repairs due to issues found and outrageous bids obtained by inspectors.
• Seller and buyer negotiate for request for repairs and costs associated.
• If the buyer doesn’t like what is in the reports, if the home doesn’t appraise for what the sales price is and the buyer doesn’t have cash to come in above market, and/or if the buyer/seller cannot agree on the final terms the buyer may walk and the seller will need to start all over again with looking for new buyers.
• Any repairs necessary are made, possibly a re-inspection is done if required and necessary in order to move the loan process through. (fire detectors, water heater straps, carbon monoxide detectors and dry rot or section 1A pest repairs noticed are sure fire ones called out).
• Disclosures and required releases are completed and sent back and forth during the process between the seller and the buyer, including notice to perform demands if they don’t abide by the timelines in the contract, or request to release all contingencies in order to protect the buyers deposit for the seller in case the seller does not perform. Many people assume this is automatic, it is not and actually sellers rarely end up being able to keep a buyer’s deposit who cancelled a purchase contact after the fact-, see my blog article here)
• If there is an HOA, ordering the necessary documents and taking the required steps to get their consent to the home sale must be done and their fees must be paid. HOA’s are not known to be exactly expedient so this must be done ahead of time, typically on a rush basis.  In some neighborhoods an inspection of the house by the HOA and called out repairs are required before they will consent to the sale.   If there are past due HOA fees this can also be a problem as they will need to be paid.
• Coordination is required between the buyer, loan office rand escrow in order to make sure loan documents make it to title on time and that all parties sign.
• Seller needs to vacate the home if they haven’t already, making sure the home stays in good clean condition and nothing is damaged or broken that wasn’t already that way when the buyer saw the home.
• Buyer may want to do a final walk through for confirmation the home is in the same condition it was when they originally or last saw it.
• The loan is reviewed for funding and if approved and no issues the wire is then requested and once available is sent to the title
• Title receives the wire, makes sure all documents that are necessary and required have been reviewed and signed and sends the deed to the county recorder’s office to be recorded.
• County recorder’s office records the deed and sends back confirmation to title that the deed has recorded.
• Title advises the seller/attorney and buyer/agent that escrow has closed. Attorney notifies seller and seller and buyer exchange keys, remotes, etc. if they have not done so already.
• Title wires the funds to the seller.
• Buyer moves into the property!
• Seller moves on with their next chapter and sends a glowing testimonial to their attorney for helping them through the process; they know they could not have done it without them!
• Attorney congratulates the sellers and does a final review of the file before closing it.
• Title mails a final closing package to the seller a week or two after the close of escrow.

Highly Rated and Experienced California Real Estate Broker Attorney and Lawyer handling For Sale by Owner (FSBO) Real Estate Sales.

Please call, email or use the contact form on the right today to schedule a complimentary attorney consultation.  The For Sale By Owner (FSBO) service is provided electronically and by phone, so I can efficiently serve clients in any California county – presently I am accepting clients throughout Northern and Southern California. With substantial legal and real estate experience, I am able to provide value where most agents and attorneys alone simply cannot, this is the benefit of hiring an experienced real estate attorney who is also a licensed and practicing real estate broker. This is a combination that is hard to find but important to have on your side.