How to Sell a House by Owner in California

Buyers’ agents will expect compensation for the work they do to bring a buyer to a sale, such as arranging showings and helping to tee up and qualify the buyer. Plus, when a seller isn’t working with an agent, the buyer’s agent may end up carrying more of the weight to get the deal to the finish line, which may result in them prioritizing working with a listing agent who will share the workload vs. a FSBO listing.

Next: Consult our guide on who pays closing costs when selling a house by owner for more details.

Finally, a FSBO sale does not mean that a seller won’t need any professional assistance. California is the most heavily regulated state in the country, and real estate transactions for properties located in California tend to be more complex compared to some other states. The California Association of Realtors (CAR) lists no fewer than 10 disclosure forms required for nearly all residential real estate transactions, with dozens of additional stipulations and advisories for buyers and sellers to know about. (We’ll address disclosures later in this post.)

For these reasons, most people who sell by owner in California will need to hire an attorney to review and prepare key documents and make sure paperwork is filled out properly.

Pros and cons of selling a house by owner

Selling your California home FSBO can be a mixed bag. So, before we share our selling tips, let’s lay out some pros and cons to help you decide if this is the route for you.

In spite of the cons, we’ll help you navigate the challenges of FSBO if you’re committed to selling your California house without agent assistance. For some, selling a home FSBO is a challenge worth accepting, and success can be measured in more ways than one.

Steps to sell a house by owner in California

By opting for a FSBO sale, you’re putting yourself in competition with homes that have the advantage of a real estate agent’s extensive marketing resources. These steps aim to give your home a better chance of resembling a professional listing and attracting the attention of potential buyers. The most important thing for sellers to remember in a more challenging market is to get back to basics. Here’s what top agents recommend to their clients.

Step 1: Address needed repairs and maintenance

FSBO sellers in California may consider getting a home inspection prior to listing their home for sale. Addressing any issues upfront helps buyers have peace of mind when making an offer. However, be aware that if you get a pre-listing inspection, you will be required to share relevant findings with buyers and how you did or did not address them.

Step 2: Fill out your disclosure forms

Sellers in California are required to complete a number of disclosure forms. It’s not a bad idea to start working on them early on in the sale process or even prior to listing so that you know they are taken care of.

Transfer Disclosure Statement

The main form to know is the Transfer Disclosure Statement (TDS), which is considered to be one of the “most important and well-known” seller disclosures, according to CAR. Similar to other state disclosure forms, the TDS documents anything that would be relevant for buyers to be aware of regarding the known condition of the property.

CAR also specifically notes that sellers are required to provide the TDS even when selling without a real estate agent. It’s expected that this form be delivered “as soon as practicable, before transfer of title.”

The TDS walks sellers through checking off which features the property does or does not have — such as a trash compactor and central heating. It also prompts sellers to share whether they are aware of a number of possible issues with the property or important details to know about it. This includes whether the seller knows of any asbestos, additions made without permits, easements or encroachments, neighborhood noise problems, and more.

Seller Property Questionnaire

The Seller Property Questionnaire is a supplement to the TDS, aimed at drawing out any additional information that sellers know about the home that isn’t noted in the TDS. Here’s a non-usable example of what that form looks like. One of the more unusual required disclosures in California is whether the seller knows if an occupant of the property died in the home within the past three years.

Natural Hazard Disclosure Statement

Another disclosure form to be aware of is the natural hazard disclosure (NHD) expert’s report and accompanying NHD Statement, which discloses to a prospective buyer if the property is located within certain types of natural hazard zones. Examples include a flood hazard zone, dam failure inundation area, fire hazard severity zone, wildland fire area, an earthquake fault zone, or a seismic hazard zone.

Additional California real estate disclosures

Sellers with homes built before 1978 will also need to provide a lead-based paint disclosure booklet, as well as the Lead-Based Paint and Lead-Based Paint Hazards Disclosure form. Here’s a non-usable sample of what that form looks like. If “termite clearance” is required by the contract or the buyer’s lender, then the seller will also need to provide what’s called a pest control inspection report and certification.

If you want to familiarize yourself with the list of possible disclosures, you can review it directly from the California Association of Realtors. A real estate attorney can provide a FSBO seller with legal guidance on completing the disclosures as required by law.

“There are a lot of disclosures and requirements FSBO sellers are not aware of, and that opens them up for potential liability after the sale goes through,” says Glen Henderson, a top real estate agent and HomeLight Elite Agent in San Diego.

While most sellers will need to complete at least some of these forms, there are exemptions to be aware of.

Step 3: Declutter, clean, stage, and add curb appeal

Research shows that deep cleaning and decluttering your home prior to listing will pay off in huge rewards. In fact, HomeLight surveys of top agents show an estimated price increase of $3,700 for deep cleaning and $8,000 or more for decluttering. Well worth a weekend’s work! (Or the cost of a professional, if you so choose.)

You may also want to consider strategically staging your home so that buyers can envision how each space could be used. According to agents polled by HomeLight, professionally staged homes can sell for up to 13% more than unstaged homes.

Without the independent advice of a real estate agent, FSBO sellers can invite over friends and family for an honest opinion of how the house looks: Will it pass muster with buyers, or do some spaces in the house need a bit more attention?

Finally, don’t forget about the outdoors. A report by NAR revealed that 92% of Realtors recommend sellers improve their homes’ curb appeal before listing. The top recommended projects include landscape maintenance, standard lawn care services, and tree care.

Step 4: Hire a professional photographer

One of the biggest mistakes homeowners make when they’re selling on their own in California is taking inadequate photos. Henderson says attractive photography is a major weak spot for FSBO sellers. “Most for sale by owners just use photos they’ve taken from their phones or personal cameras, and they don’t highlight the home very well,” he explains.

Especially in California, where buyers know they’ll be shelling out a hefty sum of cash for a home, you need to blow away shoppers looking for homes online.

For $150–$300 per shoot, a professional photographer will take steps to shoot each room from the best angle; ensure optimal interior and natural lighting; and edit for the ideal brightness and exposure.

A high-quality camera with a wide-angle lens is also essential to showcasing entire rooms rather than half or three-quarters of what’s there. For these reasons and more, professionally photographed homes can sell up to 50% faster than houses marketed without high-quality photos.

In addition to professional photography, consider these add-ons to enhance your FSBO listing:

• Drone photography. Getting an aerial view of the property can help buyers see the location and layout. 77% of real estate agents use drone photography in their listings, so using this method will help your FSBO listing compete.
• Video walk-through. A professionally edited video walk-through will help attract out-of-town buyers who might not be able to come for an in-person showing.
• Floor plan imaging. Having a 2D or 3D floor plan image allows buyers to see spatial relationships regarding how the home is connected.

Note: When selling a house by owner in California, the seller will need to arrange for these marketing services on their own and budget for them as part of their listing expenses. When working with a full service real estate agent, professional listing photography is almost always going to be included — and many agents offer aerial photography and 3D tours as well as part of their listing package.

Step 5: Price your home competitively

When selling a house by owner, you need to take care to set the right asking price for your home. Price too high and your property is likely to be on the market longer than necessary; price too low and you could significantly undersell your home.

Follow these steps to price your California house for the market:

Start with a free online home value estimate

As a starting point, look at several online estimators for your home’s value. HomeLight’s Home Value Estimator aggregates publicly available data such as tax records and assessments, your home’s last sale price, and recent sales records for other properties in the same neighborhood of your California home.

Gather your comps

Comps are recently sold homes comparable to yours in characteristics such as size, age, condition, and major features. The most reliable comps are going to be those within as close of a radius as possible to the location where you’re selling a property. Since you won’t be able to directly access MLS data without a real estate license, you’ll need to look at major home search sites to collect your data.

Conduct your own comps analysis

Compare your home’s features against the nearby comps you collected. Hopefully, the houses you studied give an indication of an appropriate price range for your home. From there, you can make dollar adjustments based on characteristics that add value (pools, new floors, an extra bedroom) versus detract from it (a busy street, deferred maintenance, less square footage).

Get a pre-listing appraisal

A DIY comps analysis is risky if you don’t have a ton of experience making sense of property data. Alternatively, you could pay for a pre-listing appraisal. An appraiser will combine desk research with an onsite visit to your home to provide a professional and independent opinion of value. Appraisals usually cost $357 on average, and getting one doesn’t mean that a buyer’s lender won’t require a separate and independent appraisal before closing. However, it can reduce some of the stress of pricing your home for sale since appraisers are licensed and trained for this work.

Step 6: Market your home to buyers

When it comes to marketing your home, you’ll do yourself a favor by posting across multiple platforms for visibility. Combined, around 30% of FSBO sellers use online outlets, 19% set up yard signs, and 20% work to generate word of mouth through friends and neighbors.

Listing on the multiple listing service (MLS) will get your property more visibility. As a FSBO seller, you can opt to have your property listed on the MLS for a flat fee, with pricing ranging from as little as $100 to a few thousand dollars, depending on the package you select. Or, you can employ a listing service that will charge a percentage of the sales price (typically 1%–1.5%) for broader services that include MLS access.

Step 7: Field and negotiate offers using California’s forms

Hopefully, your marketing efforts lead to one or more offers on your California property. But not every offer is a good offer.

As a FSBO seller, you’ll be responsible for negotiating a contract you’re satisfied with. Price is a major factor, as are other details of the agreement, such as whether you’ll cover any of the buyer’s closing costs, when you’ll agree to move out, and which contingencies will be included in the contract.

After an initial offer is made using the California Residential Purchase Agreement, buyers and sellers use counter offer forms provided by the California Association of Realtors to continue negotiations. Either party can withdraw a counter offer verbally, though it’s better to do so in writing using what’s called the Withdrawal of Offer (C.A.R. Form WOO).

The agreement is considered binding when the final counter offer is accepted and received by the buyer or seller that made the counter offer.

Let’s review some of the top points of negotiation you may encounter:

Contingencies

Buyers may ask for the offer to be contingent on other factors, such as the sale of their existing home or their ability to obtain financing. They are also likely to include a home inspection contingency, which is a stipulation in the purchase agreement that says the buyer can inspect the home, top to bottom, and then decide whether to move forward with the purchase.

Finally, FSBO sellers should be aware of the home appraisal contingency, which buyers often add as a protection if the appraised value comes in lower than the purchase price. A contingency-free contract is rare, but in a seller’s market, buyers are more likely to waive one or more to strengthen their offer.

Closing costs

Both buyer and seller will have costs to cover at settlement. However, some of these costs — such as title fees, escrow fees, and transfer taxes — can be negotiated in many instances. A buyer may request that you pay a portion of their closing costs, but in today’s seller’s market, it’s been more likely for sellers to either pay nothing or even ask that the buyer cover a portion of their costs as a condition of the sale.

Repairs

Following the inspection, a buyer may ask you to make necessary repairs or for monetary compensation based on an estimation of what the repair is likely to cost. You can either accommodate the request or do nothing, but the buyer can choose not to continue with the purchase if the results of the inspection aren’t satisfactory (unless they waive the home inspection contingency).

Closing date

Closing dates can also be subject to negotiation. Buyers may need longer to secure financing, or sellers may ask for additional time to move out after closing. On the flip side, one party may ask for a quicker closing date to enable them to move faster if needed.

Earnest money

The earnest money deposit is typically a small amount of money that goes into an escrow account to show that the buyer is serious. The amount is negotiable, and it always goes toward the purchase price. When buyers add contingencies to the contract, they are able to back out of the deal and get their earnest money back in certain circumstances, such as if anything unsatisfactory turns up on the inspection report. You’ll need to have a third-party account set aside to hold this earnest money until closing (such as a title company).

To reduce the risk of errors in your purchase contract, hire a real estate attorney to review the contract for you; the attorney can also advise you on necessary steps in preparation for closing. A real estate attorney usually charges between $150 to $400 per hour, but some can bill up to $500 or more.

Step 8: Complete steps to closing

After you go under contract with the buyer and finalize the details of the purchase agreement, escrow opens. In California, real estate transactions are typically closed by escrow agents, title companies, or lenders.

In California, the buyer and seller can each propose their escrow of choice but must ultimately agree on which company to work with to close the deal, according to the Department of Real Estate. Before the deal is final, you can expect the following next steps to occur:

Step 9: Close the sale

California is a “dry funding” state, meaning that all parties gather to sign mortgage documents, but the required paperwork to officially close the loan doesn’t need to be completed at that time. Notably, no mortgage funds are distributed to the seller on the day of signing.

Dry refers to waiting for the ink to proverbially dry before a deal is closed. The extra padding of the clock provides an additional layer of protection to ensure there aren’t any issues with the transaction.

Be aware that closing as a FSBO seller does not mean that you avoid all closing fees. Common seller closing fees include transfer taxes (California has state, county, and city transfer taxes; although the latter two are variable), prorated property taxes, and settlement fees. A seller in California may also pay some title fees. This can amount to around 1%–3% of the sale price.

If a buyer uses an agent, a seller may also be asked to pay all or part of the buyer’s agent commission.

Your selling expenses will be deducted from the sale proceeds at closing, and what remains will be your payout. Consult our guide on who pays for closing costs when selling a house by owner for more details.

Next steps are likely to include: 

• Attorneys review documents for errors.
• Clear title; resolve any title issues necessary to close.
• Transfer ownership of your home to the buyer at settlement.
• Funds are disbursed to the seller and other parties involved after the “dry funding” period is complete — which can take a few days.
• Review your settlement statement for a complete list of fees and credits of the sale.

Reminders for closing: 

• Gather your title, loan documents, survey, insurance information, and any permits for renovations and have them ready for closing.
• You’ll also need your financial information for a final wire transfer.
• If you’ve agreed to make repairs based on the inspection, you’ll probably need to provide receipts to prove that the repairs have been completed.

Challenges California FSBO sellers face

Some enterprising sellers may not blink an eye at the steps outlined above, while others may find the process overwhelming.

“I’ve heard from people who have tried to complete For Sale By Owner sales, but they don’t understand how much is actually involved with the process,” says Henderson.

The possibility of underselling your home is one major concern. NAR, which has been tracking FSBO vs. Realtor industry data since 1981, found in its latest dataset that FSBO homes sold at a median of $310,000, well below the median of agent-assisted homes at $405,000.

A recent survey from NAR highlights which steps in the process FSBO sellers found to be the hardest:

• Setting an accurate price (15%)
• Understanding and performing paperwork (7%)
• Selling within the planned length of time (7%)
• Preparing the home for sale (4%)

Alternatives to selling a house by owner

There’s more than one way to sell a house. Below, we list a few of the methods available to California sellers in addition to FSBO.

Option 1: Request a cash offer for your home

Selling your California house to a cash buyer allows you to bypass the traditional real estate process, such as inspections and repairs, home prep and staging, and can significantly accelerate your home sale.

HomeLight’s Simple Sale platform connects you to the largest network of cash buyers in the U.S. We use the information you provide about your home plus local neighborhood data to get you a convenient, no-obligation cash offer within 24 hours. If you accept the offer, you can close in as little as 10 days.

HomeLight was founded in 2012 and is accredited by the Better Business Bureau with an A+ rating. The company has 4.8 stars on Google based on hundreds of reviews.

Simple Sale shows you a side-by-side comparison of your cash offer amount against an estimation of what you could list for on the open market to help you make an informed decision.

Option 2: Hire a top California real estate agent

As explored earlier, research shows that agents statistically help homes sell for quite a bit more, which can help you offset or even exceed the amount you might pay in commission fees.

When you partner with a performance-proven agent, the results are likely to be even better. Internal transaction data at HomeLight finds that the top 5% of real estate agents sell homes for as much as 10% more.

A real estate agent helps you fetch the highest sale price by putting together a beautiful listing, advising you on targeted upgrades, and negotiating the best price — and that’s just scratching the surface of their expertise. If you’d like to explore the option of working with a top agent further, HomeLight would be happy to make an introduction. Whatever direction you choose, we hope that selling your California home goes smoothly!

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