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Navigating FSBO Transactions: Eric Sander, Chicago Attorney, Offers Legal Advice for Buyers and Sellers

Chris Turn

The For Sale By Owner (FSBO) market offers both buyers and sellers a unique opportunity to bypass traditional real estate agents and take full control of their transactions. While this can save thousands in commissions, it also comes with legal complexities that require careful attention.

Eric Sander, a respected Chicago real estate attorney, has helped countless buyers and sellers navigate FSBO transactions while avoiding common pitfalls. Here, he shares essential legal advice to ensure a smooth and successful sale.

What Is an FSBO Transaction?

A For Sale By Owner (FSBO) transaction occurs when a homeowner sells their property directly to a buyer without hiring a real estate agent. Sellers choose FSBO to avoid paying commission fees, while buyers may find more room for negotiation when dealing directly with the owner.

However, without a professional real estate agent guiding the process, both parties must be extra diligent in handling contracts, disclosures, and legal requirements.

Legal Considerations for FSBO Sellers

Selling a home without an agent means the legal burden falls entirely on the seller. To avoid mistakes, Sander recommends the following key steps:

1. Prepare a Legally Sound Sales Contract

The purchase agreement is the most critical document in an FSBO sale. This contract should clearly outline:
✅ Purchase price and payment terms
✅ Closing date and possession details
✅ Contingencies (such as home inspections and financing approval)
✅ Earnest money deposit and refund conditions

“A poorly written contract can lead to costly disputes,” warns Sander. “It’s crucial to have an attorney draft or review the agreement before signing.”

2. Provide Mandatory Seller Disclosures

Illinois law requires sellers to disclose known property defects. The Illinois Residential Real Property Disclosure Act mandates that sellers inform buyers about issues such as:

  • Structural defects
  • Plumbing or electrical problems
  • History of flooding or water damage
  • Environmental hazards (e.g., lead-based paint or asbestos)

“Failing to disclose defects can lead to legal action,” Sander cautions. “Honest and thorough disclosure protects sellers from future liability.”

3. Ensure a Clear Title

Before selling, sellers should conduct a title search to ensure the property has:
✔️ No outstanding liens or judgments
✔️ No ownership disputes
✔️ No easements that may affect use of the property

A real estate attorney can verify title status and help resolve any issues before closing.

4. Handle Closing Documents Properly

In Illinois, real estate closings typically require legal representation. FSBO sellers must ensure they have:

  • A legally binding purchase contract
  • A properly prepared deed to transfer ownership
  • Settlement statements detailing all closing costs
  • Mortgage payoff documents (if applicable)

“Mistakes at closing can delay the transaction or lead to legal disputes,” says Sander. “An attorney ensures all paperwork is correct and legally enforceable.”

Legal Considerations for FSBO Buyers

Buying an FSBO home requires extra due diligence to ensure the property is legally sound. Sander advises buyers to follow these essential legal steps:

1. Conduct a Home Inspection

Since FSBO sellers aren’t working with agents, some may overlook necessary repairs or fail to disclose defects. Buyers should:
✅ Hire a licensed home inspector
✅ Verify structural integrity, plumbing, and electrical systems
✅ Request repairs or price adjustments if issues arise

“A home inspection is your best defense against unexpected repair costs,” says Sander.

2. Verify the Property’s Title

Before purchasing an FSBO home, buyers should:
✔️ Order a title search to check for liens, unpaid taxes, or legal disputes
✔️ Purchase title insurance to protect against ownership claims
✔️ Confirm that the seller has the legal right to sell the home

“A clear title is essential to avoid future legal complications,” Sander emphasizes.

3. Secure Proper Financing

FSBO sellers may only accept cash offers, but many buyers still require mortgage financing. If financing is needed:
✅ Obtain pre-approval from a lender
✅ Ensure the home appraises at the agreed purchase price
✅ Include a financing contingency in the purchase agreement

“Financing issues are a top reason FSBO deals fall through,” warns Sander. “Make sure your contract protects you if the loan isn’t approved.”

4. Work with a Real Estate Attorney

Since FSBO transactions lack agent oversight, a real estate attorney is essential to ensure the deal is legally sound. An attorney can:

  • Review contracts and disclosures for accuracy
  • Negotiate terms to protect buyer interests
  • Oversee the closing process to prevent legal issues

“An attorney ensures everything is handled correctly so buyers don’t inherit unexpected problems,” says Sander.

The Role of an Attorney in FSBO Transactions

Whether you’re a buyer or seller, working with an experienced real estate attorney like Eric Sander can prevent costly legal mistakes.

How an Attorney Helps Sellers:

✅ Drafts or reviews the purchase agreement
✅ Ensures compliance with disclosure laws
✅ Resolves title issues before closing
✅ Prepares deed and closing documents

How an Attorney Helps Buyers:

✅ Reviews contracts, title reports, and disclosures
✅ Ensures the transaction is legally binding and risk-free
✅ Verifies financing and closing terms
✅ Oversees the final closing process

“Skipping legal representation in an FSBO deal is a risky move,” says Sander. “An attorney ensures that both buyers and sellers avoid pitfalls and complete a smooth transaction.”

Making FSBO Transactions Successful

FSBO transactions can be cost-effective and beneficial for both buyers and sellers, but legal complexities make professional guidance essential.

Eric Sander advises:

  • Sellers: Ensure contracts, disclosures, and title documents are handled correctly.
  • Buyers: Conduct thorough inspections, title checks, and legal reviews before closing.

“A well-executed FSBO transaction can save time and money, but only if it’s done correctly,” Sander concludes. “Having an experienced attorney on your side makes all the difference.”

If you’re considering buying or selling an FSBO home in Chicago, consult a real estate attorney to protect your investment and ensure a smooth closing process.

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