When it comes to buying or selling a property, there are many real estate agents or brokers who can help with the process. However, more and more people are opting for the option of selling their property themselves, known as “for sale by owner” (FSBO). This can often save a significant amount of money in commission fees, but it also requires a bit more work and responsibility on the seller’s part. One of the key aspects of selling a property on your own is drafting a legally binding contract. In this article, we will discuss some common questions and concerns for FSBO sellers who are drawing up their own contract.
What Is a Real Estate Contract?
A real estate contract is a legally binding agreement between the buyer and seller that outlines the terms and conditions of the sale. It typically includes information such as the sale price, closing date, and any contingencies or conditions that must be met before the sale can be finalized. A contract serves as protection for both parties and ensures that the transaction is completed smoothly.
Can I Draft My Own Real Estate Contract?
Yes, you can! While it is recommended to have a lawyer or real estate agent review the contract before signing, it is legally possible for a seller to draft their own contract. However, it is important to note that real estate contracts can be complex and if any mistakes are made, it can lead to legal trouble down the road. It is always recommended to seek professional guidance if you are unsure about any aspect of the contract.
What Should Be Included in My Contract?
Your contract should be comprehensive and include all the necessary information in order to protect both parties. Here are some important items that should be included:
1. Property Description: The contract should include the legal description of the property, including the address, lot size, and any other relevant details.
2. Purchase Price: The contract should state the agreed-upon purchase price and how it will be paid (e.g., cash, check, financing).
3. Contingencies: The contract should include any contingencies that must be met before the sale can be finalized, such as a home inspection, appraisal, or financing approval.
4. Closing Date: The contract should specify the date by which the sale must be completed.
5. Disclosures: The contract should include any required state or federal disclosures, such as lead-based paint or asbestos.
6. Signatures: All parties involved in the sale should sign and date the contract.
What Should I Avoid Including in My Contract?
While there are many things that should be included in a real estate contract, there are also some things that should be left out. Here are some items you should avoid including:
1. Personal Information: Do not include personal information such as your social security number, driver’s license number, or bank account information.
2. Illegal Terms: Do not include any terms that are illegal or unethical, such as discrimination based on race, gender, or religion.
3. Unenforceable Terms: Do not include terms that are unenforceable or unrealistic, such as a seller retaining possession of the property after the closing date.
In conclusion, drawing up your own real estate contract as a FSBO seller is possible, but it is important to understand the complexities and seek professional guidance if needed. By including all the necessary information and avoiding any illegal or unenforceable terms, you can protect yourself and ensure a smooth transaction.