If you are SELLING your home as a For Sale by Owner (FSBO), without a “Buyer Agent” and have found a purchaser ready, willing, and able to buy your home your first step is to go to a real estate attorney to draw up a sales agreement to facilitate the contractual sale of your home. This process can also be carried out by the purchaser. Either way you will need to retain a lawyer specializing in FSBO Real Estate to protect your interests.

There are 5 more steps that a FSBO seller, purchaser or their retained real estate lawyer must go through to facilitate the sale of the home.

1. Open Escrow
2. Follow the buyer's progress in securing financing
3. Clear title
4. Deal with disclosures and inspections
5. Sign the deed and close escrow

It's not necessary to follow these in exact order, although the first obvious thing to do is to open the escrow. This starts title search to ensure there are no liens registered against the home. A lien is typically a loan or other debt that encumbers or prevents the title from being cleared. It is the seller’s obligation to clear any liens, but it is obviously in the purchaser’s interest to ensure the title is “free and clear”. Escrow can be opened simply by bringing the sales agreement to an escrow officer.

If “suitable financing” is a condition of sale identified within the FSBO sales agreement there should be a time allowance associated with this condition. The purchaser must contractually waive any and all “conditions of sale” before closing the transaction and sale of home. It is not uncommon or unreasonable to request a copy of the financial institutions commitment to provide financing and the conditions placed upon that commitment. Even if the purchaser was “pre-approved” by a financial lender there are typically conditions associated with pre-approval. The most common conditions tied to financing are appraisal, income verification, and credit check. If the sale of home can't be finalized because of lack of financing you want to find out as quickly as possible and get the house back on the market.

Of course, you'll need to disclose to the buyer (as required by your state/province or the purchase contract) defects in your FSBO property that you are aware of. If the purchaser identifies “acceptable home inspection” as a condition of sale, this too will have to be addressed and waived upon a favorable inspection. Other inspections may include a termite and/or pest inspection (and other reports that may be required). If problems are identified, you might have to make repairs, or renegotiate the price or terms of the sale of home as compensation for any deficiencies.

A FSBO real estate sales agreement should include a specific “closing” date. The actual “closing” process should only take three to four weeks. Lenders generally require 7 banking days to approve financing, home inspections (construction, pest and termite) can be scheduled and completed within 2 weeks. Unless there are extenuating circumstances (start of school year) sales agreements typically allow 2 - 3 months, after all conditions of sale have been waived, to facilitate the contractual close and transfer title and deed to purchaser.

The down payment and closing costs from the buyer are held in escrow and the lender is ready to fund the home purchase. All that remains is for you to sign the legal documents and deed. At this point you will also be notified of the amount of funds received on closing.

If you are purchasing another home, its closing should be coordinated to close simultaneously with your existing home. You'll also need to arrange for utility turn- offs and -ons as well as movers.

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