FSBO Legal Requirements by State

When selling your home without a realtor, you assume all the legal responsibilities that an agent would typically handle. This includes understanding and complying with federal, state, and local laws governing real estate transactions.

Legal requirements vary significantly by state, and failure to comply can result in lawsuits, financial penalties, or deals falling through. This guide provides an overview of common requirements, but you should always consult with a real estate attorney in your state for specific legal advice.

These federal requirements apply to all home sales regardless of state:

Lead-Based Paint Disclosure

• Required for homes built before 1978
• Must provide EPA-approved disclosure form
• Must provide EPA pamphlet "Protect Your Family from Lead in Your Home"
• Buyers must have 10-day opportunity to conduct lead inspection
• Must keep signed disclosure for 3 years
• Violations can result in $10,000+ fines

Fair Housing Laws

• Cannot discriminate based on race, color, religion, sex, national origin, familial status, or disability
• Applies to advertising, showings, and buyer selection
• Use neutral language in all marketing materials
• Make reasonable accommodations for disabled buyers
• Violations can result in federal lawsuits

Truth in Advertising

• All advertising must be truthful and not misleading
• Cannot make false claims about property features
• Must accurately represent square footage and lot size
• Photos must accurately represent current condition
• Cannot omit material facts that affect value

Most states require sellers to complete a property disclosure statement. While specifics vary, common required disclosures include:

Property Condition Disclosures

• Known defects in major systems (plumbing, electrical, HVAC)
• Roof leaks or structural issues
• Previous flood or water damage
• Pest or termite problems
• Environmental hazards (asbestos, radon, mold)
• Soil or foundation problems
• Previous insurance claims

Legal and Financial Disclosures

• Liens or encumbrances on the property
• Homeowners association membership and fees
• Pending legal actions affecting the property
• Easements or right-of-way agreements
• Zoning violations or non-conforming uses
• Property tax assessments or appeals
• Rental income or tenant occupancy

Here are examples of specific requirements in major states:

California

• Transfer Disclosure Statement (TDS) required
• Natural Hazard Disclosure Statement
• Megan's Law database disclosure
• Smoke detector and water heater compliance
• Death disclosure (if within 3 years)
• Lead-based paint disclosure (pre-1978 homes)

Texas

• Seller's Disclosure Notice required
• Flood zone disclosure if applicable
• Homeowners association disclosure
• Lead-based paint disclosure (pre-1978 homes)
• Previous flood damage disclosure
• Addendum for Property Subject to Mandatory Membership in Property Owners Association

Florida

• Seller's Property Disclosure Statement
• Flood zone disclosure
• Homeowners association disclosure
• Radon gas disclosure
• Lead-based paint disclosure (pre-1978 homes)
• Sinkhole disclosure if applicable

New York

• Property Condition Disclosure Statement
• Lead-based paint disclosure (pre-1978 homes)
• Attorney review period (typically 3 days)
• Cooperative and condominium disclosure requirements
• Environmental hazard disclosures

A legally binding purchase contract must include these essential elements:

Basic Contract Elements

• Names and signatures of all parties
• Property address and legal description
• Purchase price and payment terms
• Closing date and possession details
• Contingencies (inspection, financing, appraisal)
• Property inclusions and exclusions
• Earnest money amount and handling

Important Contingencies

• Inspection contingency with specific timeframes
• Financing contingency with loan details
• Appraisal contingency if applicable
• Sale of buyer's current home contingency
• Title examination contingency
• Homeowners insurance contingency

The closing process involves several legal requirements to properly transfer ownership:

Title Requirements

• Clear title search to identify any liens or encumbrances
• Title insurance to protect buyer and lender
• Resolution of any title issues before closing
• Proper deed preparation and execution
• Recording of new deed with county records
• Payment of any outstanding liens or judgments

Closing Documentation

• HUD-1 Settlement Statement or Closing Disclosure
• Deed transferring ownership
• Bill of sale for personal property
• Affidavit of title or seller's warranty
• Property tax prorations
• Utility transfer agreements
• Keys and access codes transfer

FSBO sellers face increased liability exposure. Here's how to protect yourself:

Documentation Best Practices

• Keep detailed records of all communications
• Document all known property issues and repairs
• Maintain receipts for improvements and maintenance
• Take photos of property condition
• Get written estimates for any recommended repairs
• Keep copies of all disclosure forms and signatures

Insurance Considerations

• Review homeowner's insurance coverage during sale period
• Consider umbrella liability insurance
• Maintain adequate coverage until closing
• Understand vacancy clause implications
• Coordinate with buyer's insurance for closing day
• Consider errors and omissions insurance if available

When to Consult Professionals

• Complex ownership situations (trusts, estates, divorce)
• Unusual property characteristics or zoning issues
• Multiple offers or bidding situations
• Buyer financing complications
• Title issues or liens
• Any uncertainty about legal requirements

These common mistakes can lead to legal problems:

• Failing to complete required disclosure forms
• Not providing mandatory federal disclosures
• Misrepresenting property features or condition
• Using discriminatory language in advertising
• Accepting offers without proper contract terms
• Not understanding contingency deadlines
• Failing to properly handle earnest money
• Not coordinating with title company or attorney
• Missing important closing deadlines
• Not maintaining proper documentation