Paperwork for Selling a House Without a Realtor Cover

Paperwork for Selling a House Without a Realtor in 2022

Are you looking to sell your house without a real estate agent?

This can be a great option for saving on commissions, but it also comes with its own set of challenges. One of these includes figuring out the required paperwork for selling a house without a realtor.

In this blog post, we’ll go over the basics of what you need to do in order to sell your home without an agent, including the necessary paperwork for selling a house without a realtor in Texas. We’ll also provide some tips on how to make the process as smooth as possible.

5 steps to sell a house without a Realtor:

Here are the main steps you should be aware of when selling a house without a Real Estate agent.

Marketing your home for sale

1) Market the home for sale

If you are not using a Realtor to sell your home. You are technically a For Sale By Owner seller (FSBO). 

You should start thinking about how your home will be marketed if you’re not using a Realtor. There are some sites, like the FSBO section of Zillow, geared to FSBO sellers that you can use to market your home.

In order to get the most exposure and the most potential buyers, your goal should be to get on as many sites as possible. 97% of home buyers search for their home online so there is no question that this is a critical step.

However, the majority of home buyers are looking for homes on the MLS and not searching on FSBO sites. The most successful FSBO sellers will pivot away from FSBO sites (where the majority of potential buyers are not searching). Instead, they maximize their visibility by listing their property on their local MLS. 

Listing you home on the MLS means technically you are no longer a FSBO. However, using MLS services like ListingSpark can give you all the added visibility online without paying the huge listing commissions that most FSBO sellers are trying to avoid.

2) Understand what to do if the buyer is unrepresented

You may find a potential buyer that is also unrepresented after marketing your house. This can start to get a little complicated, even if you have an agreement on price. We’ll break down what to do if you find an unrepresented buyer.

Here is the information you will need to get from unrepresented buyers in order to complete the contracts: 

  • Sales price
  • Down payment amount
  • Earnest money amount (typically 1% of the sales price)
  • Title company and escrow officer
  • Who is agreeing to pay for title insurance? 
  • Option period duration (typically 5-10 days depending on the scope of inspections needed)
  • Closing Date
  • Pre-approval letter and financing terms from the buyer

There is more information needed once you have the contracts themselves. However, this information is enough to have an agreement in principle between a buyer and seller. This should allow you to move on to the next phase of preparing a written contract. 

Remember, if the buyer has their own agent, that agent will prepare the contracts to submit the offer. 

3) Paperwork needed to sell a house in Texas

There are a variety of contracts and addendums needed to complete a transaction in Texas. These documents can easily be found on the Texas Real Estate Commission website.

Below are the most commonly used contracts to sell a house in Texas:

Seller’s Disclosure Notice

The seller’s disclosure notice is required by sellers of previously occupied single family residences. It contains information regarding material facts and the physical condition of the property.

Per the contract, the seller is required to provide this to the buyer within a mutually agreed upon time period (typically 1-3 days).

Lead Based Paint Addendum

The lead based paint addendum is used to disclose if there is lead paint in properties built before 1978. This addendum is required for all homes built before 1978.

1-4 Residential Resale Contract

The 1-4 residential resale contract is the most frequently used contract form. It is used for the resale of residential properties that are either a single family home, a duplex, a tri-plex or a four-plex.

It is not used for condominium transactions, new homes, vacant land, or farm and ranch properties.

Here are the contracts used for condo’s or vacant land.

  1. Condo Contract: used in the sale of a condo. When using this, you will not need a HOA addendum as that information is baked in to this contract.
  2. Unimproved land: used for lots or vacant land that are not considered farm or ranch properties.

Third Party Financing Addendum

The third party addendum is used when a mortgage is involved. The most common loan types are conventional, VA or FHA.

Homeowner’s Association Addendum

This homeowner’s association addendum is used when someone has to be a member of a property owners association in order to own the property. This allows the buyer to decide if they want information about the details of the association or not. This addendum also outlines the HOA deliverables and fees. 

4) Send everything to the title company

Once you have all your paperwork in order and a contract that is signed by all parties, it is time to send everything over to the tile company.

Your contract should be executed by entering the execution date into the contract. The execution date is is the date when the contract is signed by the last person. This should be entered by the last party to sign the contract.  

In Texas, the contract execution date is considered “day zero”. This means that all deadlines and timelines for deliverables in the contract start from the next day.

Once the contract is executed, it’s time to send all the paperwork to the title company you have chosen. If you are looking for a great title company in Texas, look no further than Spark Title. 

Once the title company receives the contract, they will reach out to the buyer to collect the earnest and option money. Earnest and option money can be paid by check, wire transfer, or in Spark Title’s case, a service called Zoccam (which is a secure way to send funds electronically without the need for a wire) can be used.

The buyer will have 3 days from the execution date to deliver the earnest money without being in default of the contract. If the 3rd day falls on a weekend, they will have until the next weekday to deposit the earnest money.

5) Understand the transaction timelines

It’s important as a home seller to understand the deliverables and deadlines in a contract for both the buyer and seller.

Important timelines for selling your home

Here are some important deadlines you need to remember:

Option Period

The option period is the time frame in which the buyer does their due diligence and completes their inspections of the home. This period typically ranges from 5-10 days.

The buyer must submit their option fee to the title company within 3 days of the execution date. If they fail to do this, the buyer will not have an unrestricted right to terminate the contract during their option period.

Earnest Money Delivery

The buyer has the same time requirement for the earnest and option money. If the buyer fails to deliver the earnest money within the allotted time, the seller has the right to terminate the contract. 

If the buyer requires the seller to provide an existing survey, there will be a timeline required.

Survey

If the buyer requires the seller to provide an existing survey, there will be a timeline required.

Title Commitment

Within 20 days of receipt of the contract, the title company on behalf of the seller must submit a commitment for title insurance to the buyer.  The title company should handle this without the seller needing to do anything.  It is however important to make sure that this happened as it creates an “out” for the buyer if the commitment is not delivered on time. 

Financing Contingency Period

If the buyer is getting a mortgage for the purchase, they will likely have a financing contingency period worked into the Third Party Financing Addendum.  This is the time frame in which the buyer obtains approval from their lender based on their credit worthiness, income, assets, debts, etc.  Should the buyer fail to get approved during their contingency period, they would lose the ability to terminate due to financing and receive a refund of their earnest money.  The typical time frame is 14-21 days in Texas. 

Homeowner’s Association Documents

It’s common for the buyer to request a copy of the HOA documents. These include the community rules and regulations, bylaws, and restrictions. Most HOA’s need 7-10 business days to deliver this without paying a rush fee.

If the seller does not give the buyer these things within the time that was agreed upon, the buyer can still end the deal until the closing date without losing their earnest money.

Closing Date

The closing date in the contract is a deliverable for both buyer and seller.

  • Buyer: The buyer must have their financing in order, which includes the mortgage, down payment and closing costs. These must be in “good funds” which typically means a wire transfer (not an ACH which is not acceptable as good funds by most title companies) or a certified check. They also must sign all closing paperwork and loan documents in order to be considered closed and funded. 
  • Seller: The seller must be prepared to deliver the property to the buyer once the transaction has closed and funded. This means the house should be empty and free of any personal items, debris or trash and typically broom swept and wiped down at a minimum unless the contract requires professional cleaning. The seller also must sign their closing documents and deliver keys to the buyer.  

Bottom Line

There are definitely some benefits to selling your home without the help of a realtor. You get to keep more of the profits, you have total control over the marketing and showing of your home, and you can move at your own pace.

However, there are also challenges that come along with FSBO. It’s important to understand all of the steps involved in closing a deal before taking on this process alone.

If you want the best of both worlds- saving money by selling without a realtor but getting professional support throughout the process- check out ListingSpark. We would be happy to help you sell your home quickly, easily, and for top dollar!

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