What It Means to Sell Your Land "For Sale By Owner"

For Sale By Owner (a.k.a. FSBO) is simpler than you’d expect, but demanding at the least. It's no easy feat to sell vacant land, let alone without a platform, connections, or legal experience! However, you have the right to sell your own land and, if you're up for the challenge, you can get more cash in your pocket by eliminating a few extra steps and being flexible. Here's how:

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1. You eliminate a real estate agent's commission. That percentage range can vary, but it's a higher return on investment for you if you market the property yourself.
2. You can offer owner financing and make more over the long run. If you're willing and able to wait it out, you can make more money if you carry title and charge interest.
3. You can take care of closing. If you don't need title insurance and you feel comfortable closing yourself, you can save a lot of money by eliminating title insurance and the title company's closing costs.

A normal real estate transaction would include a number of parties: two real estate agents/brokers, a title company or real estate attorney, a notary, a buyer, you (the seller), and a bank or two. But posting “for sale by owner” can cut that number in half. Technically, all you need to do to sell your property is sign over the Deed in return for money. So, let’s talk about how you would replace each individual on that list of usual parties.

First, you are replacing at least one of the real estate agents/brokers. Normally, you would need a real estate license to market real estate, but since you own the land yourself, you have the right to advertise. Think of it like representing yourself at trial. You aren’t licensed to practice law, but you can act as your own lawyer.

You might end up finding someone who wants to buy directly from you and doesn’t have an agent out there searching for them. In that case, you would also bypass the second real estate agent/broker.

Next, you have the option to somewhat replace the title agent/real estate lawyer. Let me be clear, you can’t provide title insurance or act like a lawyer. However, you can create and file the paperwork (as yourself) with the county in order to record the transfer. Usually, this would just include a Deed (maybe a Grant Deed) and an Declaration of Value or Affidavit depending on the county. This is the scariest part for someone who has never dealt with it before, and I've personally had Deed rejected for the dumbest of reasons and panicked. But even if your Deed is sent back, fixing it is usually pretty easy.

Now, you can’t replace the notary, as you’ll need the Deed notarized one way or another. And you can’t replace the buyer – that would really defeat the purpose here. But you might be able to replace one of the banks if you choose to offer owner financing. You would need a way to securely accept money and different paperwork for that, or have a title company handle it for you.

While taking on the role of a real estate agent, lawyer and bank might sound intimidating; it is completely doable if you're up for the challenge!

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The Legalities

I would be remiss if I didn't go over your obligations as the "O" in FSBO. I want to be sure that I’m clear about the legal obligations you have when selling your own property. While I’m not an attorney, and can’t give you legal advice, I will just impart to you my understanding of your obligations when selling directly to another person.

1. You have to be 100% honest!‍

This should go without saying, but don’t be sketchy about it. You need to be completely transparent about everything you know and don’t know about the parcel. If someone asks you where the water table is (how deep you would need to go to drill a well), and you have no idea, tell them you have no idea. If you have “access” to the property but you’ve just been walking through someone else’s land to get to it for the past twenty years, be upfront. Tell them you’re not sure if there is legal access. It pays to know your property, so we’ll show you how to dig in and do some due diligence in another article.

2. You have to own the property!

Again, this one seems obvious. But please be sure that you have complete ownership of the parcel before you try to sell. I’ve seen a lot of situations. One in which land was donated to a church who had been paying taxes for decades but hadn’t been out to the parcel. What they didn’t know is that they actually only owned 0.18% and there were dozens of other owners – only one of which used the land.

Maybe your property was a part of a relative’s will, but you haven’t gone through probate to legally put the property in your name. It would be SO frustrating to market the property, find a buyer, and get to Title – only to realize that you can’t sell what’s not yet yours. Or maybe the county treasurer isn’t great with communication. You didn’t receive a tax bill, kind of forgot about it, and now the property is in collections. Just keep in mind that you can’t sell what’s not yours.

3. Owner financing is a whole ‘nother ball game.

If you’re doing a land contract (not all states allow this), you’ll need to be sure your contract is legally binding.

You can find examples of land contracts online, but we also have a basic template we’ve used in our article about owner financing. You can also finance with a title company. Before marketing your property and offering owner financing, give a local title company a call and ask them how it works to carry title.

4. Your state might have different requirements.

Each state (or even county for that matter) has different requirements and ways of doing things. Be sure that you chat with the county. They are generally very helpful, though they aren’t able to give legal advice either!

Ultimately, posting your property for sale by owner is a lot of work, but can ensure more money in your pocket! If you're ready to take on the risk and put in the effort, you will reap the reward.