FSBO Contract – Paperwork Required During Home Sale by Owner
These days, more and more homeowners are jumping in and selling their homes themselves, forgoing the realtor. Is that a good idea? The answer is yes. However, there is a lot of paperwork involved to do that. In this article, we will review some of the forms you will need when conducting an FSBO sale of your home.
The first document you will need to have is the sales contract. This form will contain all the terms of the deal between you and your buyer. This contract is a legal agreement, so don’t forget ANY of the important details. Of course it will include the purchase price. Nevertheless; With regard to your protection and the protection of your buyer, it must also contain a contingency clause. A qualified contingency could be that the buyer is unable to secure financing OR if your home does not pass the inspection. If your buyer is buying your home “AS IS”, the details of this MUST also be incorporated into the sales contract.
The next form you should have is the Property Disclosure Form. In this document, any defects your home currently has MUST be listed. Many states and countries require this form to be used regardless of the type of real estate transaction you choose. If you do not report any of these problems with your home to your buyer, you may be legally liable for the damages and have to pay them a large sum of money. Do yourself a favor: DON’T FORGET THE OWNERSHIP DISCLOSURE FORM !!
Another important document to have is an occupancy agreement form. This form will state all the terms of the moving periods for both you and your buyer. If the buyer intends to move out before the deal is secured, they will also need a pre-occupancy agreement. This is important because once YOU move out of your home, your homeowner’s insurance plan will most likely NOT cover it. So if the house is later damaged and / or you suffer losses, you will be out of luck. So be sure to remember the occupancy and / or pre-occupancy form. An excellent real estate attorney should be consulted to make sure nothing important related to this document is forgotten.
If your home was built before 1978, you will also need “lead paint records” on a separate form. This form must fully disclose; with written notice to the buyer, any traces of lead paint used in its construction or to enhance its interior later. It is federal law that you MUST have this form. You must also provide your buyer with an EPA-approved lead paint information brochure. In addition, the warning form MUST be signed by everyone who will be involved in the purchase of your home. Again, it would be wise to consult your attorney to ensure that you do everything in accordance with the law. Otherwise, there could be dire consequences for you later on.