Who Draws Up a Contract in the For Sale by Owner Process?

According to a recent report, about 90% of the people who sell their homes each year do so with the help of a real estate agent. Using a real estate agent to sell your home will make the entire process so much easier than it would be otherwise.

There are, however, some people who would prefer to sell their houses on their own without a real estate agent. They’ll place “FOR SALE BY OWNER” signs on their front lawns and cut real estate agents out of the equation.

So, who draws up a contract in the For Sale By Owner, or FSBO, process? That’s the question you might be asking if you’re thinking about selling your home yourself.

During a traditional home sale, a real estate agent will handle putting together a purchase agreement for you. But this obviously won’t be the case when you’re creating a For Sale By Owner contract.

You should find out who will be in charge of coming up with this FSBO contract in advance. Learn all about it below.

What Is a For Sale By Owner Contract?

Before we begin discussing the answer to the question, “Who draws up a contract in the For Sale By Owner process?”, it’s important for you to know what a For Sale By Owner contract actually is. This contract is going to play a key part in your ability to lock in the sale of your home and get it “under contract.”

A For Sale By Owner contract will get drawn up once you and a buyer are able to come to terms on the sale of your home to them. While it won’t make the sale official, it will show a buyer’s commitment to purchasing your home for a particular price.

Until a For Sale By Owner contract is drawn up and signed by both you and a buyer, you’ll be able to continue to show your house off and entertain offers from other potential buyers. An FSBO contract will bring an end to this part of the selling process and allow you and a buyer to move on to the final stages of your home sale.

Why Is a For Sale By Owner Contract Important?

A For Sale By Owner contract is important for a variety of reasons. First and foremost, it’ll indicate that you have agreed to sell your home to a specific buyer and this buyer has agreed to purchase it from you. Until you’ve both put your names on the dotted line on an FSBO contract, you won’t be obligated to sell your house to them, and they won’t be obligated to buy it from you.

A For Sale By Owner contract is also important because it’ll enable a buyer to move forward with getting their hands on the proper financing so that they’re able to purchase your home. It will be difficult for them to do this until they’re able to show a lender that they have an FSBO contract in place with you.

Finally, a For Sale By Owner contract will lay out all the terms of your home sale for both you and a buyer. It’ll ensure there aren’t any issues that pop up later when it comes to the purchase price of your home, when you’ll close on your home with a buyer, etc.

You and a buyer will both be playing with fire if you decide not to create an FSBO contract for one reason or another. Neither of you will be obligated to close on your home, and that could create complications down the line if either of you changes your mind about buying or selling your home.

What Is Included in a For Sale By Owner Contract?

When you draw up a For Sale By Owner contract, it’s going to need to have certain things included in it. It can’t just be a one-page contract that essentially says, “I agree to sell my home to [NAME], and [NAME] agrees to buy it from me.”

An FSBO contract like this isn’t going to hold up well in a court of law if you or a buyer need to take legal action later. For the sake of both parties, you’ll need to have certain things included in your For Sale By Owner contract.

Here are some of the elements that will need to be clearly listed in an FSBO contract:

• The purchase price for your home that you and a buyer have agreed upon
• The downpayment that a buyer will be putting down on your home
• The closing date for the sale of your home
• A description of the property that will be sold to a buyer
• Other legal disclosures

Those legal disclosures, in particular, might really throw you for a loop. The average person doesn’t know which legal disclosures will need to be put in a For Sale By Owner contract. This is one of the many reasons why you might wonder, “Who draws up a contract in the For Sale By Owner process?”

Who Draws Up a Contract in the For Sale By Owner Process?

Now that you know more about what a For Sale By Owner contract is and why an FSBO contract is important, let’s segue into answering the question, “Who draws up a contract in the For Sale By Owner process?” It’s a question you’ll need to be able to answer prior to getting the For Sale By Owner process underway.

You’ll be happy to hear that there will be a few answers to this question. But you might not be thrilled to see what these answers are. Take a look at them below.

You

Twenty-five years ago, the idea of you putting together a For Sale By Owner contract on your own without knowing how to do it would have been laughable. Most people wouldn’t have even attempted to do it.

But in this day and age, you can technically try to piece together an FSBO contract on your own if you’d like. There are lots of internet articles that touch on how to create a For Sale By Owner contract successfully. You might want to consider giving it a try to see how you make out.

Before you do, though, you should know that creating your own For Sale By Owner contract is not going to be easy! It can be a time-consuming process that can cause a ton of confusion.

You might also find that a buyer won’t be all that comfortable with the idea of you drawing up an FSBO contract on your own. It could even lead to them backing out of a deal altogether if you don’t agree to have a professional take a crack at it.

Dual Agent

Just because you’re selling your home with a real estate agent doesn’t mean a buyer won’t have a real estate agent working on their behalf. In the event that they have one by their side, you might be able to use this real estate agent as what is known as a dual agent.

A dual agent is someone who is responsible for helping both a buyer and a seller during the For Sale By Owner process. They’ll take a step back from leading the way for a buyer and turn into an impartial third party who will represent both you and a buyer to some degree.

The problem with this, of course, is that you’re going to be putting yourself back into a position where you might have to spend money on a real estate agent. And since this is something you were trying to avoid, it might not be the best option for you. A buyer might also not like the sound of sharing their real estate agent with you.

Real Estate Attorney

If you’d like to go with an option that lands somewhere in between the two options we just described, hiring a real estate attorney to help you create a For Sale By Owner contract might be your best bet. This type of attorney will be able to handle coming up with an FSBO contract for you and a buyer.

The only drawback with taking this approach is that it could potentially be costly. Many real estate attorneys will charge you hundreds of dollars just to review real estate contracts. Drawing them up could possibly cost you thousands of dollars and cut into whatever savings you were hoping to enjoy by not working with a real estate agent.

Let Us Help You Sell Your Home Fast Without Any Hassle

As you’ve learned here, you aren’t going to love the answers to the question, “Who draws up a contract in the For Sale By Owner process?” You’re ultimately going to have to figure out a way to produce an FSBO contract, and you won’t have very much fun doing it.

We Buy Houses Memphis can help you steer clear of having to go through the hassle of creating an FSBO contract by purchasing your home from you and handling all the necessary paperwork. All you have to do is send us some basic information about your home in the Memphis area, and we’ll work on sending an offer to you for it ASAP.

Get in touch with us today to get started.