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For Sale By Owner in NC

So you want to try and sell your house yourself, and save on the real estate sales commission?  This process is known as "For Sale By Owner", or FSBO (pronounced "fiz-bow"), and going for it means that you are about to engage on a momentous roll of the dice.  Some sellers can successfully conclude the FSBO process without a problem.  Many other sellers will wish that they had never attempted it.  The purpose of this FSBO page is not to convince you one way or the other (it being our strong preference that you utilize the services of a realtor), but simply to provide a brief guide to the FSBO process from start to finish.  Now for the disclaimers:

  • This web page is NOT intended to be a comprehensive explanation of everything that can or will be encountered in a FSBO sale.  By its very definition, each real estate property is unique and will have its own particular issues to deal with.
  • All explanations on this page are based on North Carolina law and custom, and certain customs and procedures may vary from county to county within North Carolina.
  • Nothing in this summary should be applied or used for property sales outside of North Carolina.
  • For the purpose of this summary, we are assuming that a residential house is being sold, but some of the same basic principles should apply to vacant land, residential rental houses, or other non-commercial real property situated in North Carolina.
  • No attorney-client relationship exists between our firm and any visitors to this site until a visitor establishes personal contact with a firm attorney AND the firm attorney and the visitor both agree to establish an attorney-client relationship.  Although we welcome e-mail from prospective clients, the sending of an e-mail to one of our attorneys does not create an attorney-client relationship.


The first step is to evaluate the property for sale.  Here you try and separate your emotions about the property and look at the property as a buyer would see it.  This is much harder to do than it sounds.  Most people think that their house is wonderful and worth more than it really is.  You have to consider factors such as what kind of similar properties have sold in your neighborhood, how much the properties sold for, and how long the properties that were sold were on the market.  Real estate professionals call this process a "market analysis."  A market analysis is usually a free service offered by local real estate professionals to potential sellers.  The hope and expectation associated with a market analysis is that the sellers will then list the property for sale with the real estate professional.  It's not too late to abandon FSBO and list the property with a real estate professional!
You can try setting a sales price for your property by collecting market analyses from various real estate professionals, but this seems inherently dishonest and unfair to me, unless you tell the real estate professionals up front what you are doing.  You can also use the online tax office records to see what the tax office thinks yours and surrounding properties are worth, at least as of the last county revaluation.  Another way to establish value is to hire a professional residential appraiser and also consider having a "pre-emptive" house inspection done by a licensed home inspector.  You'll see later on in the FSBO process where appraisers and inspectors come back into the picture.


Once the have set the sales price, now you have to get the word out about your sale.  This is where real estate professionals really earn their commission.  They own and run the formidable multiple listing services (MLS).  The function of the MLS is to spread word of your property sale details among all real estate professionals in your area, so that a wide range of real estate professionals can then find out about your property and show it to interested buyers.  If you have Internet access, there are some fee-paid services available to FSBO sellers which can get your property into your local MLS.

Many FSBO sellers bypass the MLS and online advertising, and simply advertise using traditional direct methods, such as newspaper and magazine advertisements and putting a FSBO sign in the yard.


This is probably the most difficult step of the FSBO process.  When you employ a real estate professional, they meet with the buyers and show the house to them.  Your job is simply to keep the house presentable as directed by your real estate professional, stay out of the way, and make the final decision on any contract which may be presented by your real estate professional.  When you go FSBO, everything is up to you.  Here is a short list of potential things to watch for: (a) Browsers - there are a lot of people out there who just want to browse and have no intention of buying your house. Their function is to waste your time; (b) Nut Cases and Criminals - there are also predators out there looking for victims; and (c) Those who can't afford to buy your house - Many people, particularly first time homebuyers, want to buy more house than they can afford.

You can cut down on some of these problems by taking some common-sense precautions:
  • Use appointment-only showings
  • Conduct a pre-showing telephone interview.  Among other things, determine the intentions of the prospective buyer.  Find out about the purchase resource.
  • Get a pre-qualification letter.  You should satisfy yourself that your prospective buyers have been working with a reputable mortgage lender and that the lender has provided the prospective buyers with a written pre-qualification letter telling them how much loan they can afford and what kind of loan they should be able to get.  The pre-qualification letter is not a guarantee of financing, since that depends on a lot of other factors, but it's a good start.
  • Never be along with a prospective buyer
  • Have your cell phone handy during a showing for possible emergencies.


Before you enter into a contract (FSBO STEP 5, below), there are two basic seller disclosures which are required for North Carolina sales.  The first disclosure is the North Carolina Residential Property Disclosure Statement.  North Carolina General Statutes Chapter 47E requires all sellers to fill out this form and give it to their buyers.  The form can be downloaded in Adobe Acrobat format from the website of the North Carolina Real Estate Commission.

In completing this form, keep in mind that any "Yes" answers mean you are aware of a problem, and requires a detailed explanation, using extra sheets if necessary.  Any "No" answer means that you are not aware of any problem.  Any "No Representation" answer means that you're not certifying anything, yes or no, and is similar to an "as-is" statement in a contract.  While a "no representation" answer is safest for a seller, to a buyer it may be like waving the proverbial red flag.

The second disclosure depends on the age of the house.  If the house was built before 1978, the seller is also required to give the buyer a Lead Paint disclosure Fact Sheet and a Lead Paint Disclosure form.  The fact sheet and the disclosure form can be downloaded from the Federal government's web site.


Once the seller and the buyer have agreed on the terms of sale, everything that was negotiated must be put into writing and signed by both seller and buyer.  Verbal or "handshake" contracts for the sale of real estate are not enforceable in North Carolina, and no mortgage lender will make a loan to a buyer without a written contract.

Since 1977, the standard form for entering into a North Carolina real estate contract has been North Carolina Bar Association Form No. 2 (also known as North Carolina Association of Realtors Standard Form No. 2).  The form is entitled "Offer to Purchase and Contract," and it becomes a fully binding contract once it has been signed by both the buyer and the seller.  The contract form is copyrighted as a joint effort between North Carolina's lawyers and real estate professionals, and is therefore not available for Internet download.  A FSBO seller may be able to secure blank copies of the form from a North Carolina lawyer or realtor, but our recommendation is that a FSBO seller establish a relationship with a North Carolina real estate attorney.  The attorney can meet with the FSBO seller to go over the contract process, with it being fully understood that the attorney will draft up the final version of the contract.

The drafting of a contract must not be taken lightly, since many thousands of dollars will be at stake.  Many times the buyer and seller will have verbally negotiated the terms of the sale without considering all of the possible issues, and ask an attorney to put these terms into a formal contract.  The better practice is for sellers to have met with an attorney first, then buyer and seller carry out their negotiations using a checklist of issues to agree upon, and then have the attorney formalize the agreement into a written and signed contract.

Here is a sample checklist of issues that need to be addressed when drafting up a North Carolina real estate residential sales contract:

  • Names:  correct names of buyers and sellers
  • Personal Property Items:  What items of personal property will be staying with the house?  Personal property is defined as anything which isn't affixed to the house and which a seller might remove and take with him.

  • Purchase Price:  The amount of overall purchase price, and how that price is to be paid.  For example, if a house is selling for a total purchase price of $200,000, the seller may ask for a $2,000 deposit, with the balance of $198,000 to be paid at closing.

  • Earnest Money Deposit:  How much, and who is going to hold it?
  • Due Diligence Fee:  The newest contract form, in use since January, 2011, establishes a time period during which the buyer can terminate the contract at any time and without giving a reason. The “due diligence” fee is paid by the buyer to the seller to “purchase” this time.  From a seller’s perspective, the due diligence fee should be higher the longer the due diligence period is to be.
  • Financing Contingencies:  These used to be in the contract form.  Now, they are part of the buyer’s due diligence time frame. 

  • Closing Costs:  It is becoming increasingly common for a buyer to ask seller to pay for discount points, or for a certain fixed amount of buyer's closing costs, and write these payments into the contract.  The seller may agree to such a condition, and the amount agreed upon will be deducted from the seller's proceeds at closing.  Sometimes the seller will agree to a figure, provided that the purchase price is increased in an amount sufficient to make up for the "loss" in paying for that amount.  This is acceptable, provided that the property appraises for at least the amount of the increased purchase price.

  • Inspection Rights:  Unless the property is being sold "as-is," the buyer will want to make sure that the property is structurally sound and free from termites before closing on the property.  The Real Property Disclosures referred to in FSBO STEP 4 above are not guarantees or warranties to the buyer, and North Carolina still puts the burden on buyer of checking out a house before the buyer purchases it.  With limited exceptions, buying a used house is similar to buying a used car - the buyer needs to fully check out what the buyer is purchasing, because once closing occurs, there is virtually no real recourse against the seller.  The North Carolina form contract used to contain provisions allowing the buyer certain rights of inspection before closing.  The new contract form puts these, like financing, in the due diligence period.

  • Closing:  When will the property close?  When will possession of the property pass to buyer?  How long does the buyer need to get his loan together?

    No Unwritten Agreements:  Any other special conditions or agreements not covered by the standard contract?


Once the Contract has been fully agreed upon and written up, it needs to be reproduced in at least four (4) counterparts - one each for the buyer, seller, buyer's lender, and the person holding the earnest money deposit.  The buyer then is required to use his best faith effort to meet all of the conditions, such as financing and inspections.  The mortgage loan process can take anywhere from one week to six weeks, depending on the property and the borrower, and it is possible that the buyer will not be able to qualify for the mortgage loan needed to close.  Things that affect qualification are (but are not limited to) the actual credit report of the borrower, the value that an appraiser selected by the lender assigns to the property, and the available cash that a buyer has on hand to make up the difference between the purchase price and the loan amount.

During the due diligence period, the buyer will need to get all financing, inspections, and other closing details worked out, and the buyer and seller will need to resolve all issues arising from this due diligence.  At some point between the contract signing and the closing date, the mortgage qualification process will be completed.  If the buyer qualifies for the mortgage loan, a closing date will be set between buyer, lender and buyer’s closing attorney.

Closings in North Carolina are generally held at the office of a licensed attorney selected by the buyer and approved by the lender.  See the main M&I Real Estate Page for more information on this.  In a FSBO sale, the seller and the buyer will appear at the office of the closing attorney on the closing date and sign all of the closing documents.  The seller will be responsible for providing a warranty deed to the buyer and paying for North Carolina excise stamps and any other expenses which seller has agreed by contract to pay.  Also, in order to close, the seller will need to be able to deliver to buyer "marketable title," which means that a title search done by the closing attorney reveals that seller can deliver clear title to the buyer with "acceptable encumbrances" (such as restrictive covenants, general easements, etc.).  If the title search shows that the seller has an uncancelled mortgage, judgment, unpaid tax or other "unacceptable encumbrances" on the property, then the closing attorney will make arrangements with the seller, through closing, to pay off, satisfy or otherwise remove unacceptable encumbrances.  Certain acceptable encumbrances, like taxes for the current year which are not yet payable, or mandatory assessments for a homeowners association, will be prorated between buyer and seller at closing, so that seller has paid seller's share of the encumbrance, and buyer then assumes the encumbrance from the seller.  All of these payoffs and adjustments will be reflected on a document known as the HUD-1 Settlement Statement.  The HUD-1 will itemize all of the buyer's and seller's expenses and credits, and come down to the net funds required by buyer and the net funds payable to seller when closing is complete.  Both the buyer and the seller sign off and agree to the HUD-1.

Once all of the documents are signed, then the closing attorney collects the closing funds from the buyer.  The funds must be in the form of a bank wire, certified funds, cash, or other “cash-equivalent” funds as required by the North Carolina Good Funds Settlement Act.  Once the closing attorney is satisfied that he has the correct amount and type of closing funds, and that all documents have been properly signed and notarized, the closing attorney will proceed to update title and record the documents at the county Register of Deeds (in the county where the property is situated).  The closing attorney will not distribute the net sales proceeds to the seller until all of this is done.  The FSBO seller will need to be sure to ask the closing attorney when seller can reasonably expect to receive seller's net proceeds check.


We have now taken a brief and simplistic walk down the FSBO yellow-brick road.  Your actual mileage may vary, which is to say that FSBO sales can be easy and pain-free or difficult and complex.  Good luck!