Custom Search

Real Estate Contract - For Sale by Owner

On this page we will talk about contract clause wording, so please read the Sell My House FSBO disclaimer before proceeding. I will also be recommending where you can obtain the best for sale by owner contracts very shortly.

It would certainly be nice if there was a universal form that everyone on earth could use when for sale by owner, but that is not the case.

Each country, state, province, territory etc., has it's own pre-written clauses on their real estate purchase contract forms.

real estate contract for sale by owner

The good news is you don't have to worry if you follow a couple common sense rules when it comes to the real estate contract.

  • Use a real estate purchase contract that is for your particular area.- Here are some ideas on where to obtain these forms. Where to Acquire these Forms

  • Always use the subject to lawyer approval clause in the real estate contract. You can find the clause 

That's it! If you follow those two rules when for sale by owner, you should be fine.

Keep at Least One For Sale by Owner Real Estate Contract on Hand

You should always have a handful of real estate purchase contracts on hand when For Sale by Owner.

Yes, the Buyer(s) may bring you a completed agreement of purchase and sale, but what if they want to fill out an offer right at the house after viewing?

Be prepared! Don't forget to have counter-offer forms, some schedule "A" (these are blank forms that are attached to and form part of the agreement).

You add clauses on these forms that wouldn't fit on the main body of the real estate contract. An example might be a building inspection clause, or subject to the approval of the buyer's parents.

Looking for something else concerning contracts, forms or clauses? Just select any of the thumbnail photo links below.

Where to Obtain Forms

How do you obtain these for sale by owner real estate contract forms? I have found a couple of fantastic, easy and outstanding websites, to obtain all the forms you will ever need.

Just take a side trip to; Real Estate Forms Done Right.

Some Clauses and Fill in the Blanks You Might See

When you have the proper for sale by owner real estate contract forms for your area, the majority is all filled out for you.

All you have to do is fill in some blanks, add the subject to lawyer approval clauses, (one for you the seller and one for the buyer), and perhaps one or more additional clauses.

OK, here is some sell my house information you should find on the for sale by owner real estate contract.

  • Dated this ____ day of ___________ 20____

  • Buyer(s) ____________________________________

  • Seller(s) ____________________________________

  • Address: ____________________________________________ (civic like 1234 Anywhere Street, Somewhere)

  • Legal Description : __________________________________________ This could be something like Plan____ Block ____ Lot ____ or Condo Plan ____ etc.

- Note: You might find the legal description of your property on a surveyor's certificate, plot plan, real property report, property deed or you can always go to city hall and obtain said description.

  • The Purchase Price: Usually this is written such as $275,000.00 American Dollars or the currency used for your particular transaction. The purchase price is then usually written out like; two hundred and seventy-five thousand dollars.

  • Deposit: Buyer submits a Deposit of $________________ by negotiable check payable to _____________________ (when for sale by owner, this is usually the Seller's Lawyer) to be held in trust pending completion of sale......etc. etc.

-Note: There will be more to this clause about what happens to the deposit should the deal fall apart, either because of a condition not being met, or a buyer taking a "walk".

  • There should be a clause stating that the offer is irrevocable by the Buyer(s) __________ until ________a.m/p.m on the _____ day of __________20___. at which time if the offer is not accepted by the Seller(s), the offer is null and void and the deposit check is returned to the Buyer(s) in full, without interest.

  • A Closing or Completion Date: Completed by no later than _______ a.m./p.m. on the _______ day of ___________, 20____.- This is the date that the property changes hands and you get your cheque!

  • Fixtures included: These are items that the buyer, or you, write on the agreement that are included with the property. A fixture such as an air-conditioning unit is already included and is considered part of the property but, this helps to avoid any misunderstanding between the parties involved.

  • Chattels included: These are the extras that do not form part of the property such as a fridge and stove, or a ride on lawnmower.

-Note: Be very careful when including extras on the for sale by owner real estate contract. If the mortgage lender has an appraisal done on the property, sometimes the appraiser will value the property at or near the purchase price and then deduct the price of the chattels.

- One way to avoid this problem when for sale by owner, is to write a separate agreement for any chattels being purchased with the house.

Financing clause: Unless the Buyer is paying cash, in which case it will say so, there will be a subject to financing clause for $_________ amount on or before the _____day of ______, 20____.

-Check this date carefully. In my humble opinion, it should not be any longer than 5 banking days. Be very leery if the time is longer than that. There better be a very good reason.

  • At or near the end of the for sale by owner real estate contract, there should be a place for the Buyer(s) and Seller(s) to sign. The signatures need to be witnessed as well.

Now, there may be wording before the signatures of the buyer(s) to the effect that the buyer(s) offers to purchase according to the terms and conditions of the for sale by owner real estate contract, and that the offer is open to the seller until such and such a time.

Before the signature(s) of the seller(s) the words might be, The Seller accepts the buyer's offer and agrees to sell the property according to the terms and conditions of the contract.

Who are these Witnesses?

In the areas that I am familiar with and I suspect it is almost universal, a buyer's and a seller's signature does not have to be witnessed to make the for sale by owner real estate contract legal and binding.

The problems that may arise if not witnessed by a third party are twofold.

  • A mortgage lender may be reluctant to OK the mortgage, without a witness signature.

  • One party to the for sale by owner real estate contract could later deny that the signature was, in fact, their own.

Lesson? It's better to have the for sale by owner real estate contract witnessed.

The only people that I am aware of that cannot witness the signatures in my area are;

- People not of legal age. (minors)

- Spouses

- People that have a mental disorder that would make them incapable of understanding their role.

- Someone under the influence of alcohol or drugs.

Note: The witness does not have to understand the contract itself. They are only providing the witness that the parties are signing the document.

If the witness was ever called to testify, their only commitment would be; "Yes, I personally saw so and so, sign the contract in question."

If you have any doubts, please ask your real estate lawyer for direction.

Sell My House Conveyancing

Description: Conveyancing, pertaining to real estate law, is the transfer of legal title of property from one person(s) to another, or the granting of an encumbrance such as a mortgage or a lien.

A Visitor's Comment

Thank you for the wealth of information you are sharing.  I very much appreciate it.

In other words, this conveyancing or transfer is done in most cases by real estate lawyers.

In the spaces provided, you and the buyer would fill out the information in most cases as follows;

  • Name of lawyers

  • Address of lawyers

  • Phone number of lawyers

  • Fax number of lawyers

You may also include other information if needed, such as cell number, or e-mail.

Other Considerations

That covers most of the basics of most residential for sale by owner real estate purchase contracts where you fill in blanks.

Here are some other considerations on the real estate contract to be aware of;

  • Any changes on the original for sale by owner real estate contract that are made by either party, should be initialed by both parties, and witnessed.

  • Don't forget when for sale by owner, include those "subject to lawyer approval clauses".

  • If you have any rental equipment such as a hot water tank, or a furnace, there may or may not be a clause included where you just fill in blanks.

If not, you could write something like this:

The following equipment is rented and not included in the purchase price. The Buyer agrees to assume the rental contract(s).

You then can list the rental item, who the contract is with and what the monthly, yearly, or whatever payments are and the basic terms of the contract.

  • The Buyer may make the contract subject to a property inspection.

  • The contract will be subject to a title search which again should be done by the Buyer's lawyer.

  • Adjustments: Most adjustments, will be made as of the date of the "closing", or the date that the Buyer(s) take ownership of the property. Some common adjustments are:

     - mortgage interest - utility charges - property taxes - rentals

  • Insurance: You the seller are responsible for the property being purchased until completion of the sale. To protect yourself, Do Not cancel insurance policies on the property until the property closes.

  • Time is of the essence. When you are for sale by owner, a good practice when you have a completed signed and witnessed agreement is to write on a calendar or put on your electronic device, the date, and time that a condition of the contract is to be met.

Times are important whereas, if someone wants to hold you to a precise time, they most certainly can push the issue.

In a real estate transaction, the buyer is the party that needs to really pay attention to the times as most clauses pertain to the buyer satisfying a clause, or nullifying the contract rather than you, the seller.

All that Other Stuff

On the real estate contract, there will be other prewritten clauses that you should read. I know, it's boring :)

If you have any questions or concerns, as to the content and/or meaning of those clauses, you should ask your lawyer for an explanation.

I cannot possibly cover every clause and/or meaning on this website. This website may be read from all corners of the globe and therefore, there is to many variables to deal with.

For More Information about Contracts, Offers and Clauses

just select any of these thumbnail photo links

If you find this website of value to you, I would sure appreciate a like on Facebook. Just click the little "Like Page" in the green box.

If you know of someone that might find this information valuable either now or in the future, you can share it as well on any of the platforms that are shown to the left of this page. Thank you :)

This website was built and is maintained by Douglas F. Cameron

If you have a comment, suggestion or a question, you can go to my contact page found here.

Disclaimer                                                               Privacy Policy