Why Paperwork Is Daunting With For Sale by Owners?

One of the most beneficial reasons for hiring a real estate agent today is that they process the mounds of paperwork required for the listing and selling of a home in the United States. You may not realize how much paperwork goes into the process if you’ve never done it before without an agent. Choosing to go about selling your home as a For Sale By Owner (FSBO) means that you are assuming total liability for the transaction and will be tasked with supplementing all of the documentation, as well as completing all of the paperwork by the end of the transaction. Trust us when we say that the amount of paperwork is daunting.

Before your first showing, you need to line up the necessary paperwork. Different states have different regulations covering residential real estate transactions, so start by thoroughly researching the requirements in the state in which you are selling. To do that, visit the state and county government websites. It’s going to take a long time, and you really can’t afford to skip the fine print if you’re doing it on your own.

Document Retrieval

You want to make at least two copies of each of the documents that pertain to the house you are selling. These are the documents that need to be made available for potential buyers to peruse when they tour your home: survey that shows property boundaries, receipts and warranties for appliances and upgrades, plans and permits for all additions and upgrades, certificates of occupancy, loan documents including first mortgage and home equity line of credit, latest utility bills, latest property tax bill, title, survey, construction permits, proof of homeownership, specialty documents, floor plan or blueprints, and the list goes on. That’s just the beginning.

Before potential buyers stop by, complete a disclosure statement and plan to have copies available when you show your home or hold an open house.

Next comes the contract between the buyer and seller. The agreement needs to include: property and its characteristics, identify of the parties involved, list of fixtures and personal property, purchase price, amount of earnest money and terms of borrower’s financing, target closing date, contingencies, prorations for taxes, particulars of what type of title clearance the seller is obligated to provide, representations by the seller, legalese regarding notice, and any miscellaneous provisions the parties agree on.

Realtor Guarantee

Yes, there is even more paperwork than that. Homes are no small investment today. As such, they come with a lot of paperwork and overhead that is nearly impossible to manage. Plus, if you miss some of the paperwork, as the seller with a FSBO, you assume all of the liability. Forgetting paperwork or filling it out incorrectly opens you up to lawsuits by the end of the process – not exactly what you had in mind.

If you’re going to go rogue and list a house without a real estate agent, do your due diligence to realize the size of liability you are placing on your shoulders.