Legal Law

FSBO Contract – Paperwork required during home sale by owner

These days, more and more homeowners are taking the leap and selling their homes themselves, foregoing the realtor. Is that a good idea? The answer to that is yes. However, there is quite a bit of paperwork involved in doing so. In this article we will review some of the forms you will need when doing a sale by owner (FSBO) of your home.

The first document you will need 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; Regarding your protection and your buyer’s protection, it should also contain a contingency clause. A qualified contingency could be that the buyer is unable to secure financing OR your home fails inspection. If your buyer is purchasing your home “AS IS”, details of this MUST also be incorporated into the sales contract.

The next form you should have is the Property Disclosure Form. On this document, any defects that your home currently has MUST be listed. Quite a few states and countries require this form to be used no matter what type of real estate transaction you choose. If you do not disclose any of these problems with your home to the buyer, you may be legally liable for the damages and have to pay them a large amount of money. Do yourself a favor: DON’T FORGET THE PROPERTY RELEASE FORM!

Another important document that you must have is a contract of occupancy form. This form will state all the terms of the move-in periods for both you and your buyer. If the buyer intends to move 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 incur losses, you’re just out of luck. So be sure to remember the occupancy and/or pre-occupancy form. A great real estate lawyer should be consulted to ensure that you do not forget anything important related to this document.

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 that was used to build it or to subsequently improve its interior. It is a federal law that you MUST have this form. You must also provide your buyer with an EPA-approved lead paint information pamphlet. 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.

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