How to Sell a House by Owner in Illinois? (With Checklist)

How To Sell A House By Owner In Illinois?

To sell a house yourself in Illinois, prepare your home by cleaning, decluttering, and repairing. Price it competitively based on local real estate values and trends. Market the property with quality photos and a captivating description. Manage open houses and negotiations professionally. Hire a real estate attorney to guide you through the legal closing process.

Selling a house is often one of the most important financial decisions a homeowner will make. With the average home in Illinois selling for over $250,000, getting the best price possible while saving on commissions and fees is crucial.

• According to Zillow’s research, 92% of home sellers use a Realtor, but you can save thousands by only using a Realtor to find buyers.
• Nationally, 73% of sellers hire agents to promote the home and find buyers, while only 18% hire agents only to finalize the sale.
  • However, those statistics likely differ in Illinois. Sellers in this state often use real estate attorneys, rather than agents, to handle closings. So, it’s much lower than 18% in Illinois.
  • Sellers in this market should consult with a local real estate attorney to understand the norms and options. Attorneys may offer competitive rates compared to the typical agent commission
• In 2022, 30% of sellers found their agent online (latest stats as of October 2023), up from 15-16% in 2018-2019. More people are looking at alternatives to traditional agents.
  • Build visibility for your home with great photos, detailed listings, and smart pricing.
  • Promote the listing yourself through social media and search ads.
  • Consider asking an agent to refer buyers at a reduced cost.

In Illinois, on average, a full-service real estate agent charges around 2.68% as the listing fee and the buyer’s agent earns around 2.56%. That adds up to $14,000 in commissions on the sale of a $250,000 home. For homeowners looking to maximize their profits, or who are willing to put in extra work, selling by owner may be an attractive alternative.

Nationwide, approximately 8% of home sellers choose to sell their homes themselves without hiring a realtor. 

What Is FSBO Or For Sale By Owner?

For Sale By Owner (FSBO) in real estate is a method of selling a house, where the homeowner takes on the role of real estate agent and typically saves the 2-3% they would have paid a listing agent. In a FSBO sale, the homeowner takes on all the work of prepping, marketing, showing, negotiating, and closing the sale solo or with the help of a settlement company, without involving a professional Realtor. This approach allows homeowners to avoid paying Realtor commissions, but requires increased knowledge and expertise to navigate the real estate market independently.

Selling FSBO brings greater control and potential cost savings, but also requires time and effort. You take on the roles and responsibilities normally handled by the listing agent, including:

• Determining a competitive market value price
• Photographing and marketing the property
• Fielding calls and inquiries
• Scheduling showings
• Negotiating with potential buyers
• Preparing the house sale contract
• Navigating the closing process

The Pros and Cons of Selling Your House FSBO in Illinois

Selling your house FSBO in Illinois has both pros and cons. Pros include avoiding agent commissions, having greater control over the process, flexibility with closing dates, no upfront fees, leveraging your knowledge of the home, increased level of privacy, and learning new skills. Cons include potentially selling for less, increased legal risks, limited access to buyers, still having to pay the buyer’s agent commission, lack of real estate experience, and the time commitment involved. 

1. Pros of Selling FSBO

• Avoid paying a listing agent’s commission – This will typically amount to 2-3% of the sale price. On a $250,000 home, that’s $5,000 to $7,500 in savings.
• Greater control over the process – You make all the decisions regarding preparing, marketing, pricing, negotiating offers, etc.
• Keep your home sale timeline flexible – Without an agent, you can be more flexible with extending closing dates or allowing buyers more time to line up financing.
• No upfront fees – Aside from the buyer’s agent commission, attorney fees, and closing costs, selling FSBO does not cost any upfront fees.
• Leverage your knowledge of the home – Use your familiarity with the home’s history, repairs, upgrades, etc. to market it effectively.
• Learn new skills – You’ll become well-versed in real estate contracts, paperwork, laws, and negotiations. This is an investment, and you can use these skills many times in the future. You’ll have an advantage over other home sellers.

2. Cons of Selling FSBO

• Homes sell for less – FSBO sellers have difficulty setting a price for their homes and sell for about 27% less, nationwide. Fortunately, YOU don’t need to worry! We have a definitive guide published on ‘How to price a house for sale?’ exclusively for you.
• Legal risks – As a FSBO seller, you accept greater liability for mistakes or omissions in contracts and disclosures. Hire a flat-fee real estate lawyer to compensate for this.
• Access to fewer buyers – Realtors have access to multiple buyers and MLS listing packages that a normal seller doesn’t have access to. Yet this is not so true anymore, as there are a lot of FSBO listing sites available now. Plus, MLS sites have started to offer flat fee listings instead of subscriptions, which FSBO sellers can use.
• Still pay the buyer’s agent commission – It is customary to offer 2-3% of the sale price to a buyer’s agent in Illinois. (Though there are new alternatives out there to get a buyer’s agent for considerably less.)
• Lack of real estate experience – You don’t have the same expertise as a licensed agent when it comes to pricing, marketing, or negotiations. Of course, this guide is here to help you minimize that gap!
• Time commitment – Marketing, coordinating showings, and handling paperwork yourself takes significant time and effort. If you find it hard to make the time commitment, it’s better to go with a Realtor instead of the FSBO route.

How Do Real Estate Agent Commissions Work in Illinois?

In a typical real estate transaction in Illinois, the home seller pays their listing agent a commission at closing. The commission amount is based on a percentage of the final sale price, defined in the listing agreement. The standard total commission paid by the seller is approximately 5-6% of the sale price. This total is then split between the listing agent and the buyer’s agent.

Here is how real estate commissions are typically split in Illinois:

• Listing agent commission: 2-3%
• Buyer’s agent commission: 2-3%
• Total commission: 5-6%

What is the Average FSBO Commission in Illinois?

According to data reported by the National Association of Realtors, here are the 2022 average real estate commissions in Illinois:

• Listing Broker Fee – 2.80%
• Cooperating “Buyer’s” Broker Fee – 2.43%
• Total Broker Fees – 5.23%

So when determining potential commission savings, plan on still paying ~2.5% to a buyer’s agent on average, in addition to other seller closing costs. By selling FSBO, you can avoid paying the listing agent’s portion of the commission. 

Savings will also depend on whether you elect to pay for services a la carte, like professional photography, staging, listing assistance and attorney fees. These can reduce net savings, but are usually money well spent in terms of maximizing your sale price.

In Illinois, real estate agents must be licensed by the state. When listing a home, agents typically help sellers determine a fair asking price, market the home, qualify buyers, and negotiate sales contracts. At closing, they collect the check for their commissions.

Now that you understand agent commissions, let’s look at the typical costs if you choose to sell without a Realtor.

What Does It Cost to Sell FSBO in Illinois?

Selling your home without an agent in Illinois, known as FSBO, can save you money on listing commissions. However, there are still costs involved. Expect to spend around $7,000 to $15,000 for home improvements, professional photography, online listings, print ads, yard signs, open houses, legal fees, appraisal, buyer’s agent commission, closing costs, and moving expenses. While it may seem like a lot upfront, many sellers find the savings compared to a 6% agent commission well worth it.

Typical costs for Illinois FSBO sellers include:

1. Home improvements and repairs – Expect to spend $1,000 to $5,000 making your home appealing to buyers. Focus on paint, carpets, appliances, plumbing fixtures, and landscaping.
2. Professional photography – Real estate photographers charge $100-$200 per hour to capture high-quality listing photos.
3. Online listings – Options range from free sites like Craigslist and Zillow to paid Multiple Listing Service (MLS), which costs $200-$500.
4. Print ads – Advertising in local papers or magazines can cost $200-$500 for a limited run.
5. Yard signs – Custom signs start at around $50 each.
6. Open houses – Food, beverages, flyers, and other open house supplies will run you $50-$300 per event.
7. Home appraisal – Pay $300-$500 to get an accurate opinion of your home’s value before listing.
8. Home inspection for buyers – Buyers pay for and schedule the home inspection, typically $300-$500. If issues arise, buyers may request a credit from sellers to help cover repairs, but sellers are not obligated to provide credits.
9. Buyer’s agent commission – Plan to pay 1.5-2.5% of the sale price to agents representing home buyers.
10. Closing costs – Title insurance, recording fees, and transfer taxes add 1-3% in fees at closing.
    1. Title Search – Cost for researching property records to verify ownership history. Usually $100-$200.
    2. Title Insurance – Insures property title and protects against claims. Around 0.5-1% of sale price.
    3. Recording Fees – The county clerk fee to record the deed transfer is around $60-$100+.
    4. Transfer Taxes – Tax levied when property ownership changes, varies by state and county. In Illinois, $1.50 per $1000 of sale price, plus any applicable municipal transfer tax.
    5. Home Warranty – Optional, but buyers may expect a home warranty plan from 1 year+ covering repairs, around $300-$600.
    6. Attorney Fees – If hiring a real estate attorney to facilitate closing, average fees are around $750-$1500.
11. Moving – If relocating, plan for $5,000 in truck rental, storage, packing supplies, etc.

9 Steps to Sell Your House By Owner in Illinois

Selling your house by owner in Illinois involves several key steps. Begin by preparing your home for sale, focusing on cleaning, decluttering, and making repairs. Determine the optimal listing price based on market value and consider getting a comparative market analysis from local real estate agents. Take high-quality photos of your property to attract potential buyers online. Create print and online listings, utilizing platforms like Zillow, social media, MLS services, and local newspapers. 

Market your listing through networking, open houses, social media boosts, email campaigns, and partnerships with local businesses. Prequalify potential buyers to save time and focus on serious leads. Schedule showings and provide detailed information to interested buyers. Negotiate fair offers by keeping emotions out of it and considering multiple offers. 

Once an offer is accepted, work with an attorney to close the sale legally, including inspections, signing documents, paying bills, transferring ownership, and vacating the property.

Step 1: Prepare Your Home for a Successful Sale

Making your home shine for buyers needs to be your first priority when selling FSBO. Take time to thoroughly clean, declutter, make repairs, and add any staging touches.

Key areas Illinois home sellers should focus on:

• Clean from top to bottom – Scrub bathrooms and kitchen, dust furniture, vacuum carpets, mop floors, and wipe down surfaces.
• Declutter every room – Pack away enough furnishings and decor so rooms feel spacious.
• Make minor repairs – Fix leaky faucets, broken appliances, cracked tiles, and doors that stick.
• Improve exterior appeal – Mow the lawn, plant flowers, paint trim, and power wash siding.
• Update outdated finishes – Consider new flooring, cabinet pulls, lighting fixtures, or wall paint.
• Stage key rooms – Add furniture, artwork, mirrors, and plants to highlight aesthetics and room size.

Repairs should focus on any issues flagged in a home inspection, which you should get upfront. Defects found later on could allow buyers to renegotiate for a lower price.

Aim to keep prep costs below 2% of your home’s value. Weigh the potential sale price increase versus the cost of each improvement. The better the home looks, the higher offers you are likely to attract.

Step 2: Determine the Optimal Listing Price for Your Home

Setting the right asking price is crucial when selling FSBO. Price too high, and your home could sit on the market. Go too low, and you leave money on the table.

Aim to list your home around 3-5% above fair market value. This leaves room for buyers to negotiate down while still maximizing your sale price.

To find out what is your house worth or how to price your house for sale, follow these methods:

1. Use Online Home Value Estimation Tools

• Automated Valuation Models (AVMs) are programs that estimate a property’s market value based on data inputs.
• AVMs provide a ballpark figure, but may not capture all factors that affect value.
• Zillow’s Zestimate and Redfin’s Price Estimate are popular online tools for home value estimation.
• Zillow claims a median error rate of 1.9% for on-market homes, while Redfin’s is 2.1%.
• The Federal Housing Finance Agency’s House Price Calculator uses repeat sales data to measure changes in home prices.

2. Comparative Market Analysis (CMA)

• A CMA compares your home to recently sold properties in your area.
• Define criteria for selecting comps based on size, features, condition, location, and recent sales.
• Search for comps using online platforms like Zillow, Redfin, MLSs, or county records.
• Select 3-5 properties most comparable to your home and make adjustments for differences.
• Calculate the average adjusted sale price of comps for an estimated market value.

3. Explore Sold, Pending, and Withdrawn Listings

• Sold listings show what buyers are willing to pay and can help benchmark your home’s price.
• Pay attention to the original list price, final sale price, days on the market (DOM), and price per square foot (PPSF).
• Pending sales indicate current market demand and offer insights into negotiation strategies.
• Withdrawn listings reveal what buyers are not willing to pay and potential pitfalls to avoid.

4. Master the Market

• Understand market conditions: buyer’s market (more supply than demand), seller’s market (more demand than supply), or neutral market (balanced supply and demand).
• Identify the best time to sell your home based on historical trends and local factors.
• Assess the influence of your neighborhood on home value and address any negative aspects.

5. Price Adjustments

• Monitor indicators like views, inquiries, showings, and offers to determine if price adjustments are needed.
• Have a pricing contingency plan for different market scenarios.
• Adjust price based on market conditions, feedback, appraisal or inspection results, and competition.

6. Hire an appraiser 

• For an objective assessment, consider hiring a professional appraiser to evaluate your home’s value. 
• While not required, an appraisal can confirm your home’s market value. 
• Expect to pay $300-$500 for this service.

7. Property assessments

Check with your county assessor’s office for home valuation for tax purposes.

Other Considerations:

• Proven Pricing Tactics
  • Aim for high sale-to-list ratio by setting realistic, competitive asking price and being open to negotiation. Find the latest sale to list ratio and other real estate market trends on Redfin
  • The ’99’ strategy prices your home slightly below a round number for psychological appeal.
  • Price banding positions your home within a popular price range to attract more buyers.
  • Evaluate the pros and cons of each tactic based on market conditions and property type.
• Consider closing costs when pricing your home and negotiate with the buyer to allocate these costs.
• Recent renovation costs – Factor in the value of any upgrades you’ve made.

As tempting as it might be, avoid inflating your home’s price to an unrealistic level. Dramatically overpricing will deter most buyers.

Pro tip: 

Consider getting a comparative market analysis from 1-2 local real estate agents before listing FSBO. They will give you a realistic estimate of your home’s value in the current market at no cost.

Step 3: Photograph Your Property Like a Professional

Great photos are key to attracting potential buyers online and enticing them to schedule in-person showings.

For best results, consider hiring a real estate photographer. Quality real estate photos cost $100-$200 per hour.

If shooting photos yourself, follow these tips:

• Use a DSLR camera with a wide angle lens. Smartphone cameras will work in a pinch.
• Capture photos during the day with bright, natural lighting.
• Include exterior and interior images that show each room.
• Take 3-5 photos per room from different angles.
• Remove clutter and stage rooms before shooting.
• Adjust camera settings for sharp focus and proper white balance.
• Take straight, level shots – avoid tilting or angling the camera.
• Leave some mystery – don’t show every nook and cranny.

Edit images only slightly to correct brightness, contrast, and saturation. Avoid using filters or distorting proportions. Remember, home buyers want to see an accurate depiction.

Step 4: Create Print and Online Listings for Your Home

To attract buyers, make use of both print and online platforms to advertise your FSBO listing.

Online Options:

• Zillow – The most popular real estate marketplace. Free to directly create For Sale By Owner listings.
• FSBO.com – Leading site dedicated to connecting FSBO home sellers and buyers. Paid packages start at $399.95 for 6 months, where the listing will be syndicated to Zillow, Realtor.com, Trulia and more. You can also pay $99.95 and get listed on FSBO.com and Redfin sites with unlimited photos and 1 video.
• ForSaleByOwner.com – Well-known FSBO site where you can post your FSBO listing for free.
• Social media – Post your listing to Facebook Marketplace, Craigslist, X (Twitter), and neighborhood sites like NextDoor (free to use).
• Photo-sharing sites – Upload listing photos to Houzz, Pinterest, and Instagram and link to your listing.
• MLS listing service – Pay a flat fee of $200-$500 to list on your local MLS alongside agent listings for greater exposure.

The MLS is the centralized database of property listings that real estate agents use to list homes for sale. Traditionally, only agents could list homes on the MLS.

However, some services now allow FSBO sellers to pay a flat fee to submit their listing. The benefits of MLS listing access include:

• Exposure to all agents/brokers with access to the MLS rather than just websites. This expands your buyer pool.
• Ability to offer buyer agent commissions to incentivize agents to show and sell your home
• Credibility from being listed alongside “official” agent listings
• Inclusion on realtor.com, which many buyers search directly

Top 10 popular flat fee MLS listing services for FSBO include:

1. Beycome – Full MLS listing service starting at $99 to $499
2. ListingSpark – MLS listing and support for $299
3. MLS My Home – MLS listing packages from $99 to $1295, based on duration
4. NationalListingService – MLS packages from $199 to $285, based on property type
5. FlatFeeMLSListings – Basic MLS listing for $199, plus buyer commission
6. Houzeo – Flat fee MLS listing service starting at $199
7. FSBO.com – Flat fee MLS listing service starting at $99
8. Homecoin – Flat fee MLS listing service starting at $95
9. List Now Realty – Basic flat fee MLS service for $400
10. Unreal Estate – Nationwide flat fee MLS service with a wide range of plans

Pro tip:

Create a detailed and enticing property description to attract buyers when selling your home yourself. Highlight special features like the number of bedrooms and bathrooms, square footage, hardwood floors, and other unique selling points. Use high-quality photos to showcase these attractive features visually. Provide clear information on the home’s condition and any recent upgrades or renovations.

You can also include details about the great local area, like nearby schools, shops, parks, and restaurants. This helps paint a picture of the lifestyle offered.

Craft a compelling summary section that captures the essence of the home and neighborhood. 

For example:

“Stunning Chicago Colonial in the Heart of the City!

Nestled in the heart of Chicago, this stunning colonial-style home is the perfect blend of old-world charm and modern amenities. From the moment you step inside, you’ll be wowed by the spacious living room, complete with a cozy fireplace and ample natural light. The kitchen has been fully renovated with top-of-the-line appliances and granite countertops, making it the perfect entertainment space.

Upstairs, you’ll find three spacious bedrooms, each with its own unique character. The master suite boasts a luxurious en-suite bathroom and a large walk-in closet, while the other two bedrooms share a beautifully updated full bath.

But it’s not just the interior that’s impressive. Step outside and enjoy the fully-fenced backyard, perfect for summer barbecues and gatherings with friends and family. And the location can’t be beaten – just steps away from all the best shopping, dining and entertainment options the city offers.

Don’t miss your chance to make this stunning Chicago colonial your own. Contact us today to schedule a viewing!”

A detailed, honest, and enthusiastically written listing can help attract serious buyers and increase the chances of successfully selling your home on your own.

Print Options:

• Local newspapers – Buy classified ads strategically in real estate sections, starting at $200-$500 per ad.
• Print flyers – Make black-and-white flyers at home or order glossy brochures online starting at $50 per 100.
• For-sale signs – Place “For Sale by Owner” signs near the property entrance and at busy intersections, starting at $50 per sign.

Pro tip: 

Print physical QR codes on your yard sign, flyers, and print ads that link to your online listing. This makes it easy for buyers to learn more.

Your listings should include 20-30 high-quality photos, an accurate home description, listing price, open house dates, and your contact information.

Step 5: Marketing Your Illinois FSBO Listing

To gain maximum exposure for your home, tap into these key marketing strategies:

Network with friends, family, and neighbors 

Word-of-mouth referrals are powerful. Ask everyone you know to spread the word about your listing. Offer a referral bonus.

Hold open houses 

Open houses generate concentrated foot traffic. Market them heavily on social media, online sites like Eventbrite, and with print and digital ads. Create a welcoming atmosphere with refreshments and background music. It can help buyers envision their lives in the property.

Boost social media posts 

Pay just $10-$50 per post to reach thousands more local buyers on Facebook, Instagram, and Twitter.

Email past clients 

Build an email list of people you know have bought or sold homes in the past. Let them know about your listing.

Work with an MLS flat fee service 

Some MLS listing services will syndicate your listing across popular sites to expand reach.

Run a local ad campaign 

Beyond print ads, pay to advertise locally on Facebook, Instagram, YouTube, Hulu, or streaming TV.

Partner with local businesses 

Ask vendors you’ve worked with to co-market. For example, a moving company could promote your listing to new customers they help relocate to your area.

Aim for a marketing budget equal to 1-2% of your asking price. Cast as wide a net as possible to attract buyer leads quickly.

Step 6: Prequalify Potential Buyers

Once you start getting inquiries about your Illinois FSBO listing, your job is to prequalify buyers to avoid wasting time on under-qualified leads.

Questions to ask potential buyers or their agents:

1. Are you working with a lender? Have you been pre-approved for a mortgage? What price range?
2. Are you represented by a real estate agent? If so, what is their contact information?
3. What timing do you need for taking possession of the home? How flexible is your move timeline?
4. What type of home financing will you be using – conventional, FHA, VA, cash?
5. What down payment amount have you budgeted?
6. Are you also selling a home that needs to close first?
7. What other properties are you considering and what do you like about them?

Use this qualifying information to avoid scheduling showings with casual lookers and focus on buyers who show strong interest, are pre-approved, and have funds lined up.

Step 7: Show Your Property to Potential Buyers

Showings allow buyers to fully evaluate your home in person before making an offer. As a FSBO seller, you’ll take on the work of coordinating scheduling.

To streamline showings:

• Use an online scheduling tool like Calendly or Doodle to enable buyers to select times.
• Offer a broad range of time slots – mornings, afternoons, evenings, and weekends.
• Reply to requests promptly and follow up to confirm and remind buyers.
• Provide highly detailed driving directions and home access instructions.
• Stage each room prior to showings – turn lights on, play soft music, open blinds.
• Make yourself scarce during in-person showings to give potential buyers space.
• Follow up after to answer questions and secure buyer feedback.

Aim to limit showings to 30 minutes. This gives buyers enough time without overstaying their welcome.

Provide flyers, brochures, or printouts with listing details to send buyers home with more information. The better prepared they are, the higher offers you may receive.

Step 8: Negotiate Fair Offers with Potential Buyers

Once you start receiving purchase offers, put your negotiation skills to work.

Here are key tips for negotiating FSBO offers:

• Get all offers in writing – Verbal offers are non-binding.
• Request proof of funds – Ask buyers for bank statements proving they have enough for a down payment.
• Keep emotions out of it – Focus on facts vs feelings to get the highest price possible.
• Weigh competitive offers – Don’t accept the first decent offer. Wait to compare multiple offers.
• Make clear counteroffers – Counter in writing with a specified price and closing date.

• Offer flexibility – Be open to extending closing dates or making repairs to get better terms overall.
• Know your bottom line – Determine ahead of time your minimum acceptable price so you know when to accept.
• Bill credits over cash – Accepting a credit towards closing costs or repairs adds value without reducing sale price.
• Assess buyer qualifications – Scrutinize each buyer’s pre-approval letters and down payment funds.
• Confirm buyer financing – Ensure buyer is not depending on the sale of another home.
• Inspect carefully – Make any offer contingent on a professional inspection acceptable to you.
• Don’t take initial offers personally – Buyers will initially offer below list price – don’t be offended.
• Be ready to walk away – Be willing to turn down offers if you have other strong prospects lined up.

Budget for negotiation talks 2-3 weeks before settling on an offer to accept. Avoid accepting an offer too hastily – a higher one may come through.

Step 9: Close the Sale & Transfer Ownership Legally

Once you’ve negotiated and accepted an offer, you’ll work with the buyer’s agent and lender as well as your own attorney to close the deal.

Key steps for closing a FSBO sale:

1. Retain an attorney – Pay a real estate lawyer $500-$750 to review the purchase contract and represent your interests in the transaction.
2. Allow time for inspection – Build in 7-14 days for the buyer’s inspection and any re-negotiation.
3. Final walkthrough – Accompany buyers on one final property walkthrough before closing.
4. Sign closing documents – Expect to sign several documents at closing transferring ownership.
5. Pay any outstanding bills – Pay off any utility bills, HOA dues, taxes, and fees for the home.
6. Receive proceeds – After all closing costs and commissions are paid, you will receive the remaining sale proceeds.
7. Transfer keys & ownership – Turn over all keys, controls, codes, and cards granting access along with the deed.
8. Vacate the property – Ensure your belongings are out and home is empty on the agreed move-out day.

A real estate attorney is highly recommended to help review the purchase contract and represent you at closing. DIY legal paperwork is risky.

After successfully marketing, showing, negotiating, and closing the sale of your home yourself, reward yourself for a job well done!

Are FSBO Homes More Difficult to Finance?

One common misconception is that buyers will have a harder time obtaining financing from lenders for FSBO listings versus agent-listed homes. However, this is largely untrue.

According to Fannie Mae’s Selling Guide, lenders may not treat a property differently in terms of financing eligibility simply due to it being a FSBO sale versus an MLS-listed home.

That said, there are a few best practices FSBO sellers can follow to ensure smooth financing and prevent buyers from being denied a loan:

• Price the home competitively in line with comparables. Don’t overprice.
• Hire a licensed appraiser to assess fair market value.
• Allow the buyer to choose their preferred lender and cooperate fully with them.
• Disclose everything about the home’s condition to avoid surprises.
• Negotiate contingencies allowing the buyer to back out if financing is denied.

As long as these steps are taken to set fair terms and allow ample contingencies, a FSBO home should not face additional hurdles to secure financing. Red flags like overpricing are what often thwart loans for FSBO properties when they occur.

If you price your home competitively and allow typical financing contingencies, there is minimal added risk of financing issues simply due to selling FSBO versus with an agent. Buyers can secure financing smoothly as long as they are qualified borrowers.

Key Legal Requirements for FSBO in Illinois

Illinois law and real estate purchase contracts require sellers to provide disclosures about the property’s condition to potential buyers. This protects sellers from future liability claims.

According to the Illinois Joint Committee on Administrative Rules, sellers must provide the following disclosures and consider the key legal requirements:

1. Property Disclosures

Illinois law requires sellers to fully disclose all known material defects (Details known defects/malfunctions, hazardous/toxic materials, structural issues, etc.) about a property’s condition to potential buyers using a standard disclosure form.

2. Lead-Based Paint Disclosure

For homes built prior to 1978, sellers must provide a federally mandated lead-based paint disclosure detailing any known lead hazards.

3. Transfer Taxes

Sellers are responsible for paying state and local real estate transfer taxes at closing, amounting to $1.50 per $1,000 of sale price.

4. Smoke Detector Requirement

Illinois law requires operating smoke detectors to be present on every level of a residential property upon sale.

5. Title Company

While not legally required, it’s advisable for FSBO sellers to engage a title company to handle closing and ensure proper title transfer.  If you hire a real estate attorney, they should be able to refer you to a reputable title company.

6. Attorney Review

Having a real estate attorney review the purchase contract is highly recommended to protect your interests as a FSBO seller.

Thoroughly understanding these laws and regulations is key for a smooth transaction free of legal issues. A real estate lawyer can provide guidance on properly meeting your legal obligations.

FSBO Purchase Contract 101

The real estate purchase contract details the agreed sale terms between buyer and seller. Key sections include:

• Sale Price – Final negotiated purchase price for the home.
• Deposit Amount – Initial earnest money deposit paid after acceptance. Usually 1-2% of purchase price.
• Closing Date – Target date for completing sale and transferring ownership, typically 30-60 days out.
• Contingencies – Conditions allowing cancellation if not met, like financing approval or home inspection results.
• Possession Date – Date the buyer takes ownership and may move in. Often at closing but can be negotiated otherwise.
• Included Items – Fixtures (chandeliers, etc) and personal property to convey with home.

Do not sign a contract you don’t fully agree with or comprehend.

Who Draws Up Contract In A For Sale By Owner?

When you’re selling your house by yourself, usually a realtor working with the buyer will create the contract. But, if there’s no realtor, the buyer or seller can use an online form. It’s a good idea to have a lawyer check it over though. If needed, the buyer’s lawyer can change the form before anyone signs it.

Free Paperwork For Selling A House By Owner

Selling a house without a realtor requires proper paperwork organization.

1. Pre-listing documents include the original sales contract, property survey, mortgage statements, and more.
2. Listing documents consist of a comparative market analysis and seller’s net sheet.
3. Disclosure documents and legal requirements involve seller disclosure statements, lead-based paint disclosure, and radon disclosure.
4. During the negotiation process, documents like pre-inspection reports and purchase offer forms are needed.
5. Closing paperwork includes home inspection reports, deeds, and closing statements.

Consider legal representation for guidance throughout the FSBO process.

Is an Attorney Required to Sell a House By Owner?

There is no outright legal requirement mandating FSBO home sellers hire an attorney. Real estate transactions do not by law necessitate attorney representation. Selling a home FSBO without a real estate agent requires substantial legal expertise in areas like contracts, disclosures and transferring property title. As such, consulting with or hiring a real estate attorney is highly recommended for For Sale By Owner transactions.

A real estate lawyer can provide invaluable FSBO assistance including:

1. Guiding Required Disclosures – Ensuring proper documentation like seller disclosures to limit liability
2. Drafting the Sales Contract – Creating a comprehensive, equitable purchase agreement protecting your interests
3. Negotiating Offers – Providing an objective, expert perspective to negotiate top dollar offers
4. Navigating Inspections & Appraisal – Helping address issues discovered professionally to keep sales on track
5. Facilitating Closing – Overseeing all closing logistics and documentation thoroughly as an experienced third party
6. Resolving Any Disputes – Stepping in as needed as an advocate to resolve conflicts skillfully toward your goals

So while technically optional, enlisting a real estate lawyer provides vital guidance and protection when selling FSBO. The benefits strongly outweigh the relatively minimal expense, making legal counsel a prudent investment.

Who Pays For Title Insurance When Selling FSBO?

For real estate sales, title insurance protects the buyer and lender against any previously undisclosed claims against the property ownership coming to light later on.

But in FSBO sales, who pays for it?

In Illinois, owner’s title insurance is paid for by the seller – but the buyer typically pays for the lender’s policy and most of the settlement fees. Title insurance cost is based on the home’s sale price and lender policies.

A real estate attorney can help you negotiate title insurance payment strategically based on market norms in your area. But either way, plan for these title-related costs out of your proceeds.

How to Handle Home Owners Association (HOA) When Selling FSBO?

If selling a condo or home subject to a home owners association (HOA), you will need to navigate some additional documentation requirements when selling FSBO:

• Provide HOA Disclosures – Disclose any HOA fees, rules and deed restrictions buyers will be subject to before they submit an offer.
• Request HOA Statement – This provides documentation on the account balance, fees, pending assessments and violations.
• Order HOA Questionnaire – Provides info on HOA management, facilities, amenities, rental restrictions and more that the buyer will want to see.
• Obtain HOA Certification (also known as Paid Assessment Letter) – Certifies all HOA dues are paid in full, which is often required for closing.
• Confirm Transfer Approval – Ensure the HOA has approved the sale and transfer of ownership based on their policies before closing.
• Collect Transfer Fees – Some HOAs require a fee to process the ownership change. Disclose this to your buyer beforehand.

Your HOA’s management company will provide these documents once you request them. Having them upfront will prevent delays and confusion during the transaction process.

Mistakes that Could Cost You Money Selling FSBO

To recap, avoid these common mistakes that could lead to your Illinois home selling for less:

1. Overpricing your home initially due to emotional attachment
2. Skimping on home preparation and upgrades buyers want
3. Taking poor quality listing photos with bad lighting or angles
4. Not advertising aggressively enough on paid listing sites
5. Being unavailable to quickly respond to buyer inquiries and showing requests
6. Not prequalifying buyers thoroughly enough weeding out some
7. Carrying out showings unprofessionally on your own
8. Not knowing your bottom line and over-negotiating
9. Attempting to handle contracts and paperwork without legal assistance
10. Rushing closing paperwork and not understanding what you’re signing

As the adage goes, “Penny wise, pound foolish”. Attempting to save money upfront by skimping on preparation and marketing can cost you hugely on the backend in the form of a lower sale price or potential legal issues. Selling by owner is hard work, but earning $5,000-$15,000 by avoiding agent commissions makes it worthwhile to many sellers.

What to Do If You Can’t Sell Your House FSBO?

If you end up deciding down the road not to sell the FSBO route after all, what are your options?

Here are alternatives if attempting to sell solo doesn’t work out:

• Hire a real estate attorney – For a flat fee of $500-$1,500, they can provide legal guidance while you continue to self-list.
• Work with an MLS flat fee listing service – Some MLS services include buyer communications and negotiations for an extra fee.
• Partner with an MLS fee flat fee service – Pay a flat MLS listing fee to an agent who provides limited services guiding your sale.
• Hire a limited service brokerage – Discount brokers charge smaller commissions for listing assistance and advice.
• Use a real estate auction company – Auction pros will handle marketing and sale logistics for a percent of the hammer price.
• List with a discount broker – Pay a lower commission around 4-5% for full service assistance from agents.
• List with a traditional agent – Hire a top local real estate agent to provide full service for 5-6% commission.

Even if you start out FSBO, it’s okay to bring in help from a real estate attorney, flat fee service provider, or agent at any point in the process.

Selling your home is a major financial move. Getting the best possible price while avoiding legal missteps is critical. Don’t be afraid to pay for expertise when you need it.

FSBO Sale Alternatives That Save on Agent Commissions

If you like the idea of saving thousands on commissions but want a simpler route than FSBO, 4 strong options worth considering are:

1. Clever Real Estate

Clever is an innovative real estate startup that partners with experienced local agents who offer full service for a low 1.5% listing fee. There are no upfront costs to you.

The company vets and matches sellers with high-quality agents at big brokerages like Coldwell Banker and Century 21. Listing through Clever’s partners has saved home sellers an average of $7,000 in commissions.

2. HomeLight Listing Concierge

Similar to Clever, HomeLight offers full service, dedicated agents who list and sell your home for a low flat fee instead of percentage commission.

HomeLight agents are top-rated professionals who take beautiful photos, optimize listings, market aggressively, facilitate showings, negotiate offers, and handle contract paperwork. No need to go FSBO with this white-glove service!

3. Limited-Service Brokers

Hire a discount broker charging lower commissions of 1-2% while you handle showings and negotiations.

4. iBuyers

Sell your home directly to an institutional cash buyer like Opendoor or Offerpad often at a lower price for convenience.

The Bottom Line: Is Selling FSBO Worth It?

Selling your home yourself without an agent allows you to avoid paying a listing agent’s commission and retain greater control. However, you also have to take on all the work they’d normally handle.

Only those who meet the following criteria should consider going FSBO:

• You’re willing to spend substantial time selling your home – expect it to be like a part-time job.
• You have ample experience with home sales or confidence you can learn as you go.
• You have a flexible schedule and don’t travel often for work.
• You’re comfortable negotiating, marketing yourself, and handling stress.
• You’re highly organized and adept at paperwork.
• Your home should be easy to sell – priced fairly, in good condition, and desirable location.
• You can hire a real estate attorney easily to help with paperwork.

If the above describes you and your home, you may be a good candidate to sell without an agent in Illinois. Use the steps in this guide to maximize your likelihood of success.

Final Checklist for Selling Your Home By Owner

If you decide the FSBO route is right for your situation, here is a helpful checklist to guide your journey:

1. Research your local real estate market conditions and recent comparable sales
2. Obtain an objective appraisal to confirm your home’s market value
3. Set your listing price based on appraisal and comparable properties
4. Hire a professional photographer to take high quality photos of your home
5. Perform necessary repairs, upgrades, cleaning and decluttering
6. Stage your home to accentuate its appealing features
7. List your home on FSBO websites like ForSaleByOwner.com and Zillow
8. Pay for an MLS listing to gain broader exposure
9. Create print and digital marketing materials for your listing
10. Hold open houses for potential buyers to view your home
11. Respond promptly to buyer inquiries and showing requests
12. Verify buyer qualifications before accepting an offer
13. Disclose all property condition details as legally required
14. Negotiate purchase offers in your best interest
15. Hire a real estate attorney to help navigate the closing process
16. Transfer title and keys at the closing!

By following these steps and leveraging the guidance in this guide, you can minimize risks and maximize savings when tackling a FSBO sale. Wishing you the best of luck with your home sale! Let us know if you have any other questions.