FOR SALE BY OWNER GUIDE
WHO SHOULD SELL A HOUSE BY OWNER?
Selling without a Realtor isn’t recommended for everyone. Before deciding to forego an agent, look carefully at the pros and cons of FSBO. Selling a house on your own will occupy a lot of your time — it’s like a part-time job.
WHAT IS SELLING A HOUSE BY OWNER IN ILLINOIS
SELLING WITHOUT A REALTOR IN ILLINOIS COULD BE RIGHT FOR YOU IF: • This isn’t the first home you’ve sold, with or without a Realtor. If you’re familiar with the selling process — or if you were once a licensed real estate agent yourself — you can use your experience to guide you. • You know a real estate expert to ask for advice. If you have a relative or friend who’s willing to provide occasional advice for free, you can rely on them when the unexpected happens. •You have enough time in your schedule. If you already have a lot of work, family, or school responsibilities, you might find yourself stretched thin. • You already have a buyer. A lot of the work of selling a home is marketing and showing. Already having a buyer means you can skip all of that and just focus on closing and the paperwork that comes with it. • You want more control over the selling process. If you’d rather take charge of the pricing, marketing, and negotiations instead of handing those responsibilities over to a Realtor, FSBO gives you that freedom.
Selling your house without a Realtor in Illinois means you won’t have to pay the average Illinois listing commission of 2.68% of your home’s sale price.
However, if selling a home on your own was easy, everyone would be doing it. In fact, only 10% of home sales are by the owner. Listing your home for sale by owner (FSBO) means you’ll need to set the price, schedule showings, and open houses, and negotiate with buyers — all on your own. Plus, you’ll need to handle all of the paperwork at closing, where a minor mistake could lead to legal problems. On top of all that, you might not even save that much. FSBO sales often sell for 35% less than sales completed using a listing agent. FSBO is only recommended if you have experience selling and you’re certain you can handle everything a real estate agent would normally do.
This guide will help you decide if sale by owner makes sense for your situation and tell you how to sell without a Realtor in Illinois.
If at least a few of these things don’t apply to you, think twice before selling without a Realtor in Illinois. If saving money on Realtor commission is what you’re after, it’s worth looking into real estate agents who’ll work at a lower-than-typical commission.
UNDERSTANDING REAL ESTATE LAWS WHEN SELLING BY OWNER As a FSBO seller, you need to know and understand all your responsibilities, which include preparing your home for sale, pricing your home accurately, finding buyers, negotiating, and filing the necessary paperwork required by state law.
A GUIDE TO SELLING BY OWNER
ILLINOIS FSBO FACTS Real Estate Attorney Required | NO FSBO Yard Sign Allowed | YES Required State Discourses Residential real property disclosure report Flood Zone Statement Lead-Based Paint Disclosure Radon Testing Pamphlet and Disclosure
PREPARE YOUR HOME FOR SALE SET A PRICE LIST YOUR HOME SHOW YOUR HOME NEGOTIATE THE BEST PRICE CLOSE
Real estate laws vary across the country. For example, some states don’t allow sellers to put a FSBO sign in their yard.
Although selling your home without a real estate agent may seem like a great way to save on Realtor fees, the selling process is trickier than many people expect. If it becomes overwhelming, you can hire an agent at any time.
SET A PRICE
PREPARING YOUR HOME FOR SALE
UPGRADES + REPAIRS
UPGRADES + REPAIRS
Pricing strategy can make or break the selling process. List your home for too little, and you leave money on the table. Price it too high, and the listing goes stale, forcing a price drop that could make buyers wary of the home. To get an accurate idea of your home’s fair market value, look at comparable listings online in your area. For example, if you think your house is worth about $300,000, search Zillow, Redfin, or other listing sites for properties that are about $50,000 more or less than that target. Compare these homes to yours by asking these questions: one’s going to come see it. If you list it perfectly, you’re going to get a lot of activity. Sometimes if you underprice it, you’re going to get even more activity. But people know that it’s worth more, and you’re going to solicit offers that are at market value or above. If a home is sitting on the market for more than two weeks, now there’s a stigma that it’s either overpriced or there’s something wrong with it.” ASK KEN THE REALTOR: “Everybody’s online, everybody can see what the values are, So if you list a home too high, no
Current smoke and carbon monoxide detectors Installation of ground fault circuit interrupter (GFCI) outlets in the appropriate rooms, as required by the U.S. Department of Housing and Urban Development (HUD) Railings installed on staircases Globe covers installed over lightbulbs, especially in closets Confirming there isn’t any visible mold in the home (attic, closets, basements, or crawl spaces) Real Estate Attorney Required
Small upgrades and repairs can do a lot to sway potential buyers. The key is knowing how to spend your money to get higher offers. We asked top agents in Illinois what repairs or upgrades they think help a home sell. ASK KEN THE REALTOR: “The biggest thing I see buyers looking for are move-in ready properties, the biggest values are updated kitchen, updated bathrooms. If there is the ability to have an extra room for a workout room, a home office, a remote learning room, those are in pretty high demand right now.” “Some sellers are also converting garages into studios or “Granny Flats”.
PHOTOGRAPHY + STAGING
You’ll need professional photos for your listing, and you’ll want to showcase a clean and furnished home for potential buyers to see. A well-staged home can help you sell faster and for more money. BONUS TIP FROM KEN: Hire a professional stager who knows your local market and can ensure your home is ready to impress, giving you one less thing to worry about. In Illinois, expect to pay between $1,000–2,800 in staging costs. This will get you 60–90 days of a fully designed living room, kitchen, dining room, master bedroom, and bathrooms. Prices vary from city to city, so be sure to give local companies a call for specific estimates.
Make your home look more spacious by moving extra furniture to storage, especially if it’s outdated. Declutter countertops and bookshelves. There should be a combination of books, decorative items, and empty spaces on your display areas. Add pops of warm color in the form of flowers, rugs, decorative pillows, or throw blankets. Open or remove room-darkening curtains to let in lots of light.
Is the school district better or worse? Does it have the same number of bedrooms and bathrooms? Has the house been renovated more recently than yours? How do the neighborhoods and nearby amenities compare?
LIST YOUR ILLINOIS HOME Once you’ve decided on a price, it’s time to write a listing description that speaks to local buyers. Understanding their priorities will help you identify what features of your property to highlight in your listing. Here are some of the top buyer priorities in Illinois, according to real estate professionals. LISTING PRICE You will attract a lot of interest from prospective buyers if you price a home perfectly. If you price it below fair market value, you may generate even more interest. Be careful not to overprice it, though, because your home will end up sitting on the market for more than two weeks — a sign to many buyers that either the house is overpriced or there’s something wrong with it.
A pre-sale appraisal gives you a more accurate starting point for pricing your home. In Illinois, appraisals average between $400 and $750 (though they could run higher) but help you walk away with thousands more once your home is sold. BONUS TIP FROM KEN: Ask an agent to perform a comparative market analysis examining comparable properties that have sold recently in your neighborhood. Ken will do this for free! Please call or text to set up a walkthrough of the home for an evaluation of the property’s value. Call or text Ken at 917-232-2277 or email at ken@fultongrace.com
STATE OF THE ILLINOIS REAL ESTATE MARKET
Unfortunately for sellers, the Illinois market has taken a downturn. As of late 2022, the number of homes sold was down by 36.1%, and home prices in Illinois were down 2.4% compared to the same time in 2021. The number of days on the market has also almost doubled from 27 in 2021 to 57 in 2022. All of this means you’ll sell for less than you did a year ago, and it’ll take more work to sell at all. Also, because fewer people are selling their homes, you have less competition. Higher mortgage rates and several years of high prices have led to fewer buyers, but there are still some out there looking for a home. If you price your home correctly, you should be able to generate multiple offers and perhaps even start a bidding war. As the market cools and prices shrink, you’ll want to save on as many expenses as you can to maximize your profits. Selling without a Realtor is one way to save thousands. On the other hand, without the advice of a Realtor in challenging market conditions, you may end up selling for less, possibly canceling out any FSBO savings.
ARCHITECTURAL STYLE
There is high demand for modern, move-in-ready homes with open floor plans in Illinois. Talk about any unique architectural features that could set your home apart, like if it was built by a known architect, has original flooring or doors, or has any historical value. Also, point out what takes your house to the next level. For example, highlight upgrades you made like new windows that will save buyers hundreds in heating costs.
MEDIAN HOME VALUE
$234,951
MEDIAN LISTING PRICE
$249,900
LISTING PER SQFT
$169
% OF HOMES WITH PRICE REDUCTION
12.9%
RECENT RENOVATIONS
Be specific about large updates you’ve made in the last 5 years, such as rewiring electric, putting in a new roof, or installing a new furnace. List exactly when the renovation was done, roughly how much it cost, and what its current condition is today. Health and safety features that may be worth highlighting include the installation of railings on staircases and ground fault circuit interrupter (GFCI) outlets in the appropriate rooms.
WHERE TO LIST YOUR HOME
The best place to market your home is on the MLS! MLS listings populate onto real estate websites like Zillow, Redfin, and Realtor.com, increasing your home’s online presence. That’s important because 51% of buyers found the homes they purchased via the Internet. However, agents are the only ones who can list on the MLS. You can work with an agent and still maintain control. As a FSBO seller, you also have several free or low-cost options. ForSaleByOwner.com | This well-established and recognized for-sale-by-owner site caters specifically to people wanting to buy or sell FSBO homes. It’s free to advertise, but your home won’t show up on the MLS or syndicate to other real estate websites. That means your listing will only be viewable to buyers who go to ForSaleByOwner.com. Social media | Post your home listing to Facebook, Twitter, Instagram, and Nextdoor. Sharing is free, and you can reach a lot of people where they’re already spending time. For-sale-by-owner yard sign | You can buy a FSBO sign from most hardware stores or online for $20–50. Choose one that allows you to add your phone number so interested buyers can contact you for property information and showings. Craigslist | Posting your home on Craigslist is free and simple. Just go to the Illinois page, find your city, and create a “real estate — by owner” listing.
SHOW YOUR HOME
Organization is key when showing your home to potential buyers. You’ll need a good scheduling system and a spreadsheet to save buyers’ and agents’ contact information. You’ll want to be flexible and try to show your house at buyers’ convenience. Keep the home clean and decluttered at all times. The last thing you want is to scramble with a vacuum after a buyer calls for a last-minute showing.
ASK KEN THE RELATOR: “Cleanliness is a priority, “Price will be affected with a house that’s cluttered.”
NEGOTIATE FOR THE BEST POSSIBLE PRICE To gain the upper hand, get creative with the seller concessions you offer a buyer. While they might cost you a little more at closing, concessions sweeten the deal for buyers and could lead to a higher final sale price. Knowing what’s important to buyers in your area will help you strengthen your offer. A survey of local real estate professionals found that in Illinois, sellers often cover 2.10% to 3.00% of buyers’ closing costs. On a home of median value, that will cost an additional $5,184 to $7,406. Also consider offering these seller concessions:
In a traditional home sale, the seller’s agent draws up the contract. If you forego an agent, you’ll have to create the contract yourself or hire a real estate attorney to help. Writing a contract yourself can be difficult. You’ll need to purchase a contract template online and fill it out with a comprehensive description of the terms, including the purchase price, down payment, closing date, payment plan, disclosures, and contingencies.
Mistakes, ambiguities, or the absence of key information may lead to legal disputes or cause you to lose money from the sale.
HOME WARRANTY If your home has major appliances or systems that are on their last leg, a home warranty can give buyers peace of mind. A warranty will cover possible issues and is typically less expensive than paying for the repairs (or accepting a lower offer from a wary buyer).
If you don’t feel comfortable writing the contract yourself, you can hire a real estate lawyer. Illinois law doesn’t require FSBO sellers to use an attorney, but it’s customary to use one. An attorney can help ensure your contract is free of loopholes, secure the best terms for you, and protect you against a breach of contract.
PROPERTY TAXES
REAL ESTATE ATTORNEY FEES IN ILLINOIS Typically charge a flat fee ranging from around $500 to $750 in Illinois. Realtors say they’ve seen attorneys charge as little as $99 and as much as $1,250. Chicago real estate lawyers charge a fixed fee ranging from $500 to $1,000 for a condo or single-family residential closing, a CPA, and an attorney. Give local companies a call for specific estimates. Real Estate Attorney Required
Often, you have to share past tax information about the property before closing a sale and many first- time home buyers are shocked by how much property taxes actually are. By covering some of those costs, you can offer these buyers some financial relief and make them more inclined to close on the sale.
REPAIR CREDITS
Repair credits are win-wins for buyers and sellers. You’ll credit the buyer a set amount to cover the cost of repairs. Once the deal closes, the buyer can personally oversee the project to their liking and you don’t have to worry about repairs going over budget.
PAPERWORK TO SELL A HOUSE BY OWNER IN ILLINOIS In a typical real estate transaction, your agent will make sure you fill out all the necessary documents and forms. As a FSBO seller, you’ll have to navigate the paperwork by yourself. Here’s a quick breakdown of Illinois’ requirements.
2 FORMS OF ID In most cases, a valid passport, driver’s license, or another form of Illinois-issued ID.
CLOSE Closing is the final step in a real estate transaction. The title of the property is officially transferred from the seller to the buyer, and both parties pay their closing costs. Use a title company to facilitate a smooth closing. Title companies collect and distribute closing costs, collect signatures, ensure sellers have the right documents, and file them with relevant agencies. Title insurance protects homeowners from challenges to their legal ownership, such as unpaid property taxes, liens against the property, or clerical errors related to the property title. Typically, the seller covers the cost of an owner’s policy in Illinois, but in some cases, both parties negotiate who pays this closing cost.
COPY OF PURCHASE AND SALE AGREEMENT AND ADDENDUMS
There is high demand for modern, move-in-ready homes with open floor plans in Illinois. Talk about any unique architectural features that could set your home apart, like if it was built by a known architect, has original flooring or doors, or has any historical value. Also, point out what takes your house to the next level. For example, highlight upgrades you made like new windows that will save buyers hundreds in heating costs.
TITLE INSURANCE COST IN ILLINOIS The average rate for an owner’s title insurance policy in Illinois is 0.78%, and the average cost is $1,904 (based on a sale price of $244,494, the typical home value in Illinois).
CLOSING STATEMENT
A detailed list of all the costs associated with the sale and who pays them. This is often prepared by your escrow agent or title company.
SIGNED DEED
To legally transfer your property, you’ll need the deed that proves you’re the rightful owner. At closing, you’ll sign the deed over to the buyer.
BILL OF SALE
This is a receipt that includes both your information and the buyer’s. It will also list the final price of the home and what was included in the sale.
AFFIDAVIT OF TITLE
A notarized document that states you own the home, that there are no liens on the property, and that you are not simultaneously selling the home to someone else.
ADDITIONAL DOCUMENTS
2 FORMS OF ID If you have a mortgage on your home, you’ll need documentation of exactly how much you still owe and any payoff fees. If you’ve already paid your mortgage in full, you’ll need documentation proving that.
COPIES OF RELEVANT WILLS, TRUSTS OR POWER OF ATTORNEY LETTERS If you are selling an inherited property, you’ll need copies of all legal documents that passed ownership to you.
HOA FORMS AND GUIDELINES If your home is part of an HOA, you’ll need to give the buyer documentation on the covenants, codes, restrictions, financial history, required fees, and approval process.
RELEVANT AFFIDAVITS (NAME AFFIDAVITS, NON-FOREIGN AFFIDAVIT UNDER IRC 1445) You may need additional affidavits like a name affidavit, which lists all of your or the buyer’s previous names, or an affidavit proving you are not a foreign citizen and, therefore, exempt from certain property sales taxes.
SURVEY RESULTS OR SURVEY AFFIDAVITS A survey or an affidavit verifying a previous survey proves exactly where the property lines are.
CLOSING DISCLOSURE
HOME INSPECTION RESULTS If you had a pre-sale inspection, you’ll want the results to compare to the buyer’s inspection. If having a buyer’s inspection was part of the sales agreement, you should receive a copy of the results before closing.
If your buyer is taking out a mortgage and you agreed to certain seller’s concessions, you may need a copy of their closing disclosure to verify the lender approved your concessions.
CORRECTION STATEMENT AND AGREEMENT
PROOF OF REPAIRS OR RENOVATIONS Documentation proving any major repairs or changes to the house help verify its value. These receipts also provide buyers with information about who to contact if they discover issues with the repairs in the future.
If forms are lost or errors are discovered in the future, a correction statement and agreement requires you, the buyer, or their lender to replace or fix those documents.
HOME WARRANTY INFORMATION The home warranty service agreement will explain what is covered, for how long, and costs associated with the policy.
DISCLOSURE FORMS
FSBO RESOURCES & CHECKLIST
The Illinois Association of Realtors provides most of the forms used in a typical real estate transaction, but they can only be accessed by association members. When you’re looking for other documents, such as tax records, property surveys, and deeds, check state or local government offices, such as your tax assessor’s office or department of revenue. Just remember, many closing documents are legally binding agreements. Errors can result in an unenforceable contract that could derail your sale and cost you thousands in fees. To avoid an expensive mistake, consider working with a low-commission Realtor.
Once you find a buyer for your house, it’s time to start the closing process. In a typical real estate transaction, your agent will make sure you fill out all the necessary documents and forms. As a FSBO seller, you’ll have to navigate the paperwork by yourself.
LawDepot — Free eForms — Free US Legal — Charges a small monthly subscription However, documents may be written in other legal formats if you choose to write them yourself or hire an attorney to help with the paperwork. Here’s online forms below
Required for all real estate sales 2 Forms of ID In most cases, a valid passport, driver’s license, or other form of state-issued ID. Copy of Purchase Agreement and Any Addendums Copy of the original, signed sales agreement as well as any agreed upon changes. Closing Statement A detailed list of all the costs associated with the sale and who pays them. This is often prepared by your escrow agent or title company. Signed Deed To legally transfer your property, you’ll need the deed that proves you’re the rightful owner. At closing, you’ll sign the deed over to the buyer. Bill of Sale This is basically a receipt that includes both your information and the buyer’s. It will also list the final price of the home and what was included in the sale. Affidavit of Title A notarized document that states you own the home, that there are no liens on the property, that you are not simultaneously selling the home to someone else, etc.
Loan Payoff Information If you have a mortgage on your home, you’ll need
documentation of exactly how much you still owe and any payoff fees. If you’ve already paid your mortgage in full, you’ll need documentation proving that. HOA Forms and Guidelines If your home is part of an HOA, you’ll need to give the buyer documentation on the HOA’s Covenants, Codes, and Restrictions, financial history, required fees, approval process, etc. Survey Results or Survey Affidavits A survey (or an affidavit verifying a previous survey) proves exactly where the property lines are. Home Inspection Results If you had a pre-sale inspection, you’ll want the results to compare to the buyer’s inspection. If having a buyer inspection was part of the sales agreement, you should receive a copy of the results before closing. Proof of Repairs or Renovations Documentation proving any major repairs or changes to the house help verify its value. These receipts also provide the buyer with information about who to contact if they discover
Meet Ken Barilich, a licensed, professional real estate advisor with over 25 years of combined experience in real estate and hospitality. Ken’s passion for people is unparalleled, and he truly believes that real estate is all about the people. He is certified in SFR® Short Sales and Foreclosure Resource® and SRES® Seniors Real Estate Specialist®, making him an expert in his field. Born in Indiana and educated in Chicago, Ken has lived all over the United States, including New York and Miami, and has developed a love for traveling. He has called Chicago his home for over 35 years and is well-versed in the city’s real estate market. When Ken is not busy helping clients find their dream homes, he enjoys spending time with his family and friends, cooking, playing piano, and indulging in a few sessions of hot yoga. A recent cancer survivor, Ken lives by the daily mantra of Y.E.S. - You Deserve Satisfaction. He believes in exceeding his clients’ expectations with his Midwest values. If the cold Chicago winters become too much to bear, fear not! Ken also holds a real estate license in Florida. So, whether you’re looking to buy or sell a home in the Windy City or soak up the sun in the Sunshine State, Ken Barilich has got you covered. Namaste!
FSBO RESOURCES & CHECKLIST CONT.
issues with the repairs in the future. Home Warranty Information
Correction Statement and Agreement In the event forms are lost or errors are discovered in the future, a correction statement and agreement requires you, the buyer, or their lender, to replace or fix those documents if need be. Seller’s Disclosure Notice The seller disclosure statement details any known issues with your home and its major appliances and systems. Flood Zone Statement With some mortgages (like federally backed ones), your buyer’s lender might require information of the property’s flood risk. Lead-Based Paint Disclosure Federal law requires that if your home was built before 1978, you must disclose information about the dangers of lead- based paint to your buyer. Radon Disclosure Buyers must receive a pamphlet detailing the dangers of radon and how to test for it. Sellers must also disclose any information they know about the presence of about the presence of radon in the home.
The home warranty service agreement will explain what is covered, for how long, and any costs associated with the policy. Copies of Relevant Wills, Trusts, or Power of Attorney Letters If you are selling an inherited property, you’ll need copies of all legal documents that passed ownership to you. Relevant Affidavits (Name Affidavits, Non Foreign Affidavit Under IRC 1445, etc.) You may need additional affidavits like a name affidavit (which lists all of your or the buyer’s previous names) or an affidavit proving you are not a foreign citizen and therefore exempt from certain property sales taxes. Closing Disclosure If your buyer is taking out a mortgage and you agreed to certain seller’s concessions, you may need a copy of their closing disclosure to verify the lender approved your concessions.
KEN BARILICH Real Estate Broker 917.232.2277 ken@fultongrace.com
State Disclosure Forms
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