Selling a home without a real estate agent can be a reasonable choice in the right circumstances.
Some homeowners already have a potential buyer. Others are comfortable marketing the property, arranging showings, and negotiating directly. Some simply want to reduce the commissions and other costs associated with a traditional listing.
These can all be legitimate reasons to consider a for-sale-by-owner, or FSBO, transaction.
However, removing the listing agent does not remove the work involved in selling a home. It changes who is responsible for performing that work.
Before deciding to sell without a realtor, homeowners should understand the responsibilities they will be accepting and determine where they may still need professional assistance.
1. How Will You Determine the Asking Price?
Pricing is one of the first challenges in an FSBO transaction.
Homeowners can review recent sales, online estimates, and active listings in the neighborhood. Those sources can provide a useful starting point, but they do not always tell the whole story.
A property’s value may be affected by:
- Its physical condition
- Renovations and updates
- Deferred maintenance
- Lot size and location
- School boundaries
- Parking
- Property taxes
- Homeowner association assessments
- Competing properties currently listed for sale
- Unusual features that make the home more or less attractive to buyers
An asking price that is too high may cause the property to sit on the market. An asking price that is too low may result in the seller giving up equity unnecessarily.
FSBO sellers should have a defensible basis for their asking price rather than relying entirely on an automated estimate or the amount they hope to receive.
2. How Will You Market the Property?
A listing agent commonly handles photography, advertising, listing-service access, showing coordination, buyer inquiries, and communication with other real estate professionals.
An FSBO seller must decide how those tasks will be performed.
This may include:
- Preparing the property for photographs and showings
- Writing the property description
- Selecting advertising platforms
- Responding to prospective buyers
- Scheduling and conducting showings
- Protecting personal belongings and sensitive information
- Following up with interested parties
Marketing is not simply a matter of putting a sign in the yard and waiting for someone to appear with a cashier’s check. Buyers must be able to find the property, understand what is being offered, and obtain enough information to decide whether to pursue it.
3. How Will You Determine Whether a Buyer Is Qualified?
Interest in the property is only the beginning.
Before accepting an offer, a seller should understand how the buyer intends to pay and whether the buyer appears capable of completing the transaction.
Depending on the proposed deal, the seller may need to review:
- A mortgage preapproval or prequalification letter
- Proof of funds for a cash purchase
- The amount of the proposed down payment
- The earnest-money deposit
- Financing contingencies
- A home-sale contingency
- The proposed closing date
- Requests for closing-cost credits or broker compensation
- Other conditions attached to the offer
The highest offer is not always the strongest offer. A lower offer with reliable financing and limited contingencies may present less risk than a higher offer that depends on uncertain financing or the sale of another property.
4. Who Will Prepare the Contract?
Once a buyer is found, the agreement must be reduced to writing.
The contract establishes the parties’ rights and obligations. It may address:
- The purchase price
- Earnest money
- Financing
- Included and excluded personal property
- Inspection rights
- Attorney review
- Property-tax prorations
- Closing costs
- Possession
- The closing date
- The condition in which the property must be delivered
- Remedies if either party fails to perform
A form contract is not merely paperwork needed to reserve a closing date. Its language determines what each party has agreed to do and what may happen if the transaction encounters problems.
Sellers should understand the contract before signing it. Waiting until after a dispute arises is an exceptionally expensive method of learning what a contract means.
5. What Disclosures Must Be Provided?
Illinois sellers may be required to provide disclosures concerning the condition of the property and other matters.
The disclosures required in a particular transaction will depend on the property and the circumstances. They may include documents concerning residential real property conditions, radon, lead-based paint, or condominium information.
Providing a disclosure does not necessarily mean guaranteeing that the property has no defects. It generally requires the seller to answer the applicable questions accurately based on the seller’s knowledge.
A seller should not guess, conceal known issues, or make casual assurances that conflict with the written disclosures.
The disclosures should be addressed before the property is under contract whenever possible. Trying to reconstruct the seller’s knowledge after a buyer raises a complaint is rarely an enjoyable use of anyone’s afternoon.
6. What Happens During Attorney Review?
Many Chicagoland residential contracts contain an attorney-review provision.
During attorney review, the attorneys may propose modifications, clarify contract terms, address legal concerns, and negotiate matters not fully resolved in the original offer.
Attorney review is not merely a ceremonial exchange of letters. It may affect important issues such as:
- Inspection procedures
- Financing deadlines
- Property-tax credits
- Representations made by the seller
- Included fixtures and personal property
- Title matters
- Closing requirements
- Remedies if the transaction does not proceed
An FSBO seller can consult an attorney before the contract is signed. Doing so may allow the seller to begin with a contract that better reflects the intended agreement rather than relying on attorney review to repair unclear or unfavorable terms afterward.
7. Who Will Handle the Inspection Negotiations?
After the contract is signed, the buyer may conduct a home inspection.
The inspection may lead to requests for:
- Repairs
- Replacement of property components
- A closing-cost credit
- A reduction in the purchase price
- Additional evaluations
- Cancellation of the contract
Not every inspection issue requires a concession. Not every issue should be rejected automatically either.
The seller must evaluate the contract language, the seriousness of the issue, the cost of the requested work, the strength of the buyer’s position, and the risk of returning the property to the market.
Inspection negotiations are often where an apparently simple FSBO transaction becomes significantly less simple.
8. Who Will Coordinate the Closing Process?
Finding a buyer does not complete the sale.
Before closing, the transaction may still require:
- A title search
- Resolution of liens or title defects
- Mortgage payoff information
- Preparation of the deed and other closing documents
- Municipal inspections or transfer requirements
- Condominium documents
- Homeowner association information
- Survey review
- Lender coordination
- Resolution of appraisal issues
- Calculation of tax prorations and closing credits
- Final walkthrough issues
- Execution of closing documents
- Transfer of keys and possession
The exact requirements depend on the property, the municipality, the contract, and the buyer’s financing.
A seller should know who will be responsible for each part of the process before accepting an offer.
FSBO Does Not Have to Mean Doing Everything Alone
A homeowner who sells without a realtor does not necessarily have to manage every part of the transaction without professional help.
Different professionals perform different functions.
A seller may choose to handle the marketing and showings while hiring other professionals for legal work, photography, valuation assistance, inspections, title services, or other specific tasks.
This can allow the seller to control costs without assuming responsibility for work the seller is not equipped or willing to perform.
Three Questions to Ask Before Choosing FSBO
Before deciding to sell without a realtor, homeowners should ask:
- Do I have a reliable method for pricing and marketing the property?
- Am I prepared to evaluate buyers and negotiate the financial terms of an offer?
- Do I have a plan for the contract, disclosures, inspection, title work, and closing?
A confident answer to the first question does not automatically provide an answer to the other two.
The goal should not be to eliminate professional assistance simply for the sake of eliminating it. The goal should be to determine which services are valuable in the particular transaction and which tasks the seller can realistically handle.
Speak With an Attorney Before Advertising the Property
Many FSBO sellers contact an attorney only after they have received an offer or signed a contract.
Consulting an attorney earlier may help the seller:
- Understand the steps involved
- Identify required disclosures
- Prepare for buyer questions
- Select an appropriate contract
- Evaluate proposed terms
- Anticipate municipal or title requirements
- Avoid preventable delays and misunderstandings
Selling without a listing agent may be appropriate for some homeowners. But it should still be approached as a legal and financial transaction, not merely an informal agreement between a seller and someone who wants to buy the property.
Loftus Law assists homeowners with FSBO and private real estate transactions throughout the Chicagoland area.
This article is provided for general informational purposes and is not legal advice. The requirements and risks of a real estate transaction depend on the property, contract, municipality, and individual circumstances.
