Selling your home without a real estate agent, commonly known as For Sale by Owner (FSBO), can be an attractive option for sellers looking to save on commission fees. While FSBO sales can provide more control and potential savings, they also come with significant legal and financial risks. If you’re considering selling your home without an agent in Massachusetts, it’s essential to understand the potential pitfalls and how a real estate attorney can help ensure a smooth and efficient transaction.

The Legal Risks of FSBO Sales

1. Pricing Your Home Incorrectly

Without an agent’s market expertise, FSBO sellers often price their homes too high or too low. If your home is priced too high, you will scare away potential buyers. If it is priced too low, then you are leaving money on the table. It is advisable for FSBO sellers to pay for an appraisal service to get a good grasp on the true value of their home in the current market environment. Since you are saving potentially thousands or tens of thousands in broker commissions, it is worth the expense to purchase an appraisal of your home before moving forward with the listing. It costs roughly $200-$500 for a third-party appraisal of your home, a worthwhile expense to ensure your home is priced accurately to generate enough interest. Real Estate Attorneys partner with appraisers regularly, and can be an invaluable resource to guide you through the valuation process, along with additional market analysis and legal advice that is needed to price your home appropriately.

2. Generating Enough Demand for Your Listing

Many buyers in today’s digital economy rely on services such as Zillow, Redfin, or Realtor.com to regularly evaluate houses on the market. All of these tools pull from the same platform, the Multiple Listing Service (commonly referred to as the MLS). Typically, the MLS is only available to licensed real estate brokers and agents. Their firms pay to be able to view MLS listings, as well as post new listings. While FSBO-specific platforms do exist, they get far less traffic and do not get uploaded to the usual platforms like Zillow or Redfin. This results in far less demand for your listing. That said, FSBO owners can pay one-time fees to upload their listing to the MLS. There are a number of providers that assist FSBO sellers in uploading their listing to the MLS, with some even offering “lightweight” broker services in exchange for a much smaller commission (anywhere from 0.5%-1% of the sale price).

3. Handling & Negotiating Multiple Offers

Unlike working with an agent, FSBO sellers must negotiate directly with buyers (or the buyer’s agent). This includes:

• Individually reviewing every offer that you receive;
• Reviewing any and properly understanding any contingencies included in an offer (inspection contingency, mortgage contingency, appraisal gap clauses, etc.);
• Navigating the requested closing dates associated with each offer, and any tight turnaround times that may result from selecting a specific offer.

Once you select the most attractive offer, you have a legally binding agreement between yourself as the seller, and the selected buyer. Many buyers and sellers falsely operate under the assumption that the offer is merely a placeholder, to which the terms of the deal can be renegotiated in the Purchase and Sale (P&S) executed later. This is legally incorrect and operating under this assumption can hold significant legal ramifications. For a full overview of the supporting Massachusetts Case Law and the importance of working with a trusted real estate attorney in the early stages of the home buying and selling process, you can read our full legal blog post here.

Utilizing a real estate attorney to guide you through the selection of an offer can help you fully understand the legal implications that are associated with a given offer. An attorney will protect your interests and ensure that contractual terms are fair, legally sufficient, and favorable to you.

4. Drafting and Negotiating the Final Purchase & Sale Agreement

Once there is an accepted offer, the P&S outlines all material terms and conditions to the sale and outlines the rights and responsibilities of both the buyer and seller. For FSBO sellers, it is imperative to partner with a trusted real estate attorney to draft and negotiate the final P&S on your behalf to protect your legal interests. In Massachusetts, buyers are required by law to utilize a real estate attorney (closing attorney) to represent them. While sellers are not required by law to hire an attorney, being unrepresented in a high-stakes real estate transaction can open you up to significant legal risks and potential liability down the road. The P&S has several key provisions that must be incorporated, such as:

• Purchase Price: The agreed-upon price for the property should be clearly stated in the agreement.
• Deposits: The amount being deposited directly from the buyer (the down payment). When an FSBO seller works without a real estate agent, your attorney will act as the escrow agent, to hold and secure any initial deposits, and facilitate the ultimate transfer of funds after the closing date. 
• A Description of the Property: Often this is the street address along with a reference to the  official deed that is recorded either at the registry of deeds or with the land court (or in rare cases, with both).
• Contingencies: Any contingencies, such as a mortgage contingency, should be clearly outlined. These types of contingency clauses grant the buyer a method to terminate their offer if certain events do not occur (such as securing a mortgage or the home passing inspection).
• Special Requests: If the buyer has any specific requests for the property, such as keeping certain fixtures or furniture, these should be included in the agreement.
• Closing Date: The date on which the transaction will be finalized should be clearly stated.

Without a real estate attorney reviewing this contract, sellers risk including unclear terms, missing important legal protections, or making costly mistakes that could lead to disputes or litigation.

5. Managing Title Issues and Closing Paperwork

Before a home can be sold, the title must be clear of any liens, judgments, or ownership disputes. As the seller, part of your legal obligations set forth under the P&S are to provide “clear and marketable title.” This means that you will deliver the premises free from any legal encumbrances. Many FSBO sellers are unaware of potential title issues until they reach the closing stage, which can delay or even terminate the sale. A real estate attorney will:

• Conduct a title search for the full history of the property to ensure the home is legally transferable;
• Resolve any title defects before closing;
• Prepare all required closing documents, including the drafting and recording of the deed at the appropriate registry or district of the land court;
• Working with the buyer’s attorney to finalize the Closing Disclosure (CD) and the ALTA settlement statement.

How a Real Estate Attorney Makes FSBO Sales Easier

While FSBO sellers take on the role of a real estate agent to list and market their property, a real estate attorney provides invaluable legal advice and guidance, has extensive experience in closing real estate transactions for both buyers and sellers in Massachusetts, and can ensure that you prevent costly mistakes. With the recent changes to real estate broker commissions resulting from the NAR settlement which took effect in August 2024, more homeowners than ever are looking to sell their homes on their own in an effort to save on broker commisions. For more information on the NAR settlement and what it means for buyers and sellers in Massachusetts, read our full legal blog post here. While selling a home without a realtor can help save on commissions, the legal complexities and risks involved make working with an attorney essential.

If you’re considering selling your home on your own, contact our office to ensure that you are protected throughout the entire process. Our experienced Massachusetts real estate attorneys have extensive experience representing both buyers and sellers across the Commonwealth. If you are thinking of buying or selling your home, contact our office today for a completely free, no obligation consultation!

This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this blog you understand that there is no attorney client relationship between you and Lane, Lane & Kelly, LLP.