The short answer – your lawyer. The long answer…
So, you found a buyer for your home without using a Realtor. Congratulations. Now someone has to prepare the purchase contract.
For many Illinois FSBO sellers, this is the point where the transaction suddenly becomes much more complicated.
There is no listing agent preparing paperwork or coordinating an offer. The buyer may have an agent. The buyer may have an attorney. Or the buyer may be unrepresented too.
So who actually prepares the contract?
The Purchase Contract Is More Than a Price and Closing Date
A residential real estate contract determines the legal rights and obligations of both the buyer and seller.
Among other things, it should address:
- Purchase price
- Earnest money
- Financing
- Inspection rights
- Attorney review
- Closing date
- Possession
- Personal property included in the sale
- Tax prorations
- Credits
- Contingencies
- What happens if one of the parties does not perform (a/k/a default)
Once both sides sign, the agreement can become legally binding.
That makes the contract one of the most important documents in an FSBO transaction.
Can the Buyer’s Agent Prepare the Contract?
Sometimes an FSBO seller finds a buyer who is represented by a real estate broker.
The buyer’s broker may prepare an offer using a standard residential real estate contract form.
But there is an important distinction for the seller:
The buyer’s agent represents the buyer, not the FSBO seller.
The fact that the buyer’s agent fills out the contract does not mean that agent is advising the seller about whether the contract terms are favorable to the seller.
For an unrepresented seller, that distinction matters.
What If the Buyer Has an Attorney?
The same basic principle applies.
A buyer’s attorney represents the buyer.
The buyer’s lawyer may prepare or propose a contract, but the seller should not assume that the buyer’s attorney is also protecting the seller’s interests.
Two parties can agree on the same transaction while still having very different interests regarding financing contingencies, inspection rights, possession, tax prorations, credits and other contract terms.
Can the Seller’s Attorney Prepare the Contract?
Yes.
In an Illinois FSBO transaction, the seller can retain a real estate attorney to prepare the purchase contract once the parties have agreed upon the basic business terms of the sale.
The attorney can then make sure those terms are properly reflected in the agreement and discuss provisions that the seller may not have considered.
That can be particularly useful when there is no listing agent involved to coordinate the initial paperwork.
What About Downloading a Contract From the Internet?
Forms are easy to find online.
The harder question is whether the form fits the transaction.
A residential contract needs to address considerably more than the property’s address, purchase price and closing date.
For example:
- Is the sale contingent on financing?
- How much earnest money will be deposited?
- Who will hold it?
- What inspection rights does the buyer have?
- Is the property being sold as-is?
- What happens if the appraisal is low?
- When does possession transfer?
- How will real estate taxes be prorated?
- Are appliances or other personal property included?
- Is there an attorney-review provision?
A generic form cannot tell a seller whether those provisions properly protect that seller in that particular transaction.
Be Careful About Signing First and Asking Questions Later
One of the biggest mistakes an FSBO seller can make is treating the contract as administrative paperwork that can be sorted out later.
Once the buyer and seller have signed, the contract may already be binding.
Some Chicagoland contracts contain an attorney-review provision that allows attorneys to propose certain modifications after execution. But the scope of attorney review depends on the actual contract language.
It is considerably easier to address an important issue before signing than to discover afterward that the contract does not provide the protection you expected.
So Who Should Prepare an Illinois FSBO Contract?
There is no single answer that applies to every FSBO transaction.
An offer might originate with the buyer, the buyer’s real estate broker or an attorney.
But an FSBO seller should understand an important distinction:
Whoever puts the contract in front of you is not necessarily representing you.
If you are selling without a Realtor, having your own real estate attorney involved before the contract is signed can help make sure that the agreement accurately reflects the deal you believe you are making.
Selling Without a Realtor in Chicagoland?
If you’re considering selling your home without a traditional listing agent, I have put together a Free Chicagoland FSBO Seller Starter Kit.
The kit includes:
- Seller disclosure forms
- A pre-contract checklist
- A plain-English transaction timeline
- Transfer-tax information
- A net-proceeds worksheet
- Additional resources for navigating a private home sale
Download the Free Chicagoland FSBO Seller Starter Kit:
This article provides general information about Illinois residential real estate transactions and is not legal advice regarding any particular transaction.
