Paperwork for Selling a House by Owner In Washington

Have you recently decided to sell your home in Washington? While the prospect of a successful sale is exciting, the process to get there is not as simple as it sounds. 

If you think you can sell your house without a realtor in WA, you need to prepare yourself for an all-consuming task: paperwork.

When you hire a real estate agent, they can handle all the paperwork involved and market the property on your behalf. Of course, these services don’t come for free. This is why many homeowners choose to “sell by owner”. But what does this process entail? 

In this guide, you’ll learn what documents you need to secure along with other legal requirements. So, don’t be discouraged!

Understanding FSBO and the Importance of Paperwork in Washington State

When one chooses to “sell by owner” in Washington, this is called FSBO, which stands for “For Sale By Owner” (often pronounced “fizzbo”). This means that the property can be directly purchased from the owner. In this route, the seller takes on the responsibilities that a real estate agent or broker would typically do.

In FSBO, the homeowner sets the price, advertises the property, negotiates the terms of the sale, and prepares all the legal forms. Although it’s less expensive, other expenses are also involved, including attorney fees for handling purchase contracts.

Moreover, if a seller wants to hire a personal agent to help find homebuyers, they need to pay a commission which ranges from 2% to 3% of the sales price.

In general, selling your home without a realtor in Washington has a huge benefit: maximizing sale profits. Instead of paying commissions and agent fees, you can get the payment in full. The trade-off, however, is that all the paperwork needs to be done on your own.

Before you begin listing and showing your house to prospective Washington home buyers, you need to organize the necessary paperwork for selling a house. However, you need to consider the different regulations for each state by checking your local government’s website or consulting your attorney.

Once you have the needed documentation in place, you can be more confident about the property you’re selling. You can also assure buyers that you are the legitimate owner of the house and there won’t be any complications in the future.

Essential Steps Before Listing Your Home for Sale in Washington

Now that you understand FSBO and the value of paperwork in Washington, what are the essential steps you need to take before putting up your house for sale? Without the help of a professional, you need to carry out each process independently.

Here’s what you should do for a successful FSBO sale:

1. Set your selling price

The first step is to determine the price of your property, which can be a bit tricky if you have no idea about the current market prices. Usually, a real estate agent will make a competitive market analysis (CMA) to come up with a competitive rate.

Since it’s an FSBO property, you can do something similar by researching comparable listings near your area. The final offer should be fair enough to catch the interest of buyers but also favor your desired profit.

2. Prepare your house and take photos

As owners, you should also take the time and put effort into cleaning your home and making it more presentable to viewers. You may need to do some repairs or get rid of old house smell if it’s an older property.

Putting up some flowers, painting the walls a new color, changing the lights, or adding decor can also add to the aesthetics of the house. Then, you can hire a professional photographer to take beautiful, high-quality photos or just do a DIY photoshoot. 

3. List your home online

When listing your home online, choose websites that are user-friendly and have features that could help you market your house effectively to the right audience. You can take advantage of free sites or pay for premium advertising for a better chance of finding a buyer.

Make sure to complete the listing details, including the total size of your house, number of rooms, furnishing, and other inclusions. You may also want to disclose any issues, and any repairs done or required.

4. Review and negotiate offers

After listing, the most awaited part is getting some offers. However, you should expect that some offers may be lower than your asking price. If this happens, you can reject the offer upfront or make a counteroffer by highlighting the strong points of your home.

Make sure to review all offers and negotiate fairly without undervaluing your home. You don’t want to accept the first buyer who made a bid.

5. Finalize the sale

Once you find the right buyer, it’s time to seal the deal. But finalizing the sale in Washington takes more than just a handshake; it requires some legal steps. The buyer must also conduct a home inspection and appraisal before signing any contract or document.

To help you with this, you need to reach out to your attorney for the home sale to become official.

Required FSBO Paperwork for Selling a House By Owner In Washington

FSBO paperwork can indeed get overwhelming, especially if you aren’t familiar with the legalities of the real estate process in Washington. Aside from forms that you need to sign, buyers also have various documents to receive.

While it varies from state to state, here are some of the FSBO documents you need to prepare before, during, and after listing your house for sale:

Pre-Listing Documents

Prior to listing your house for sale, gather all the paperwork related to the property’s purchase, proof of ownership, and records of any improvements you’ve made over time. To help you with your preliminary paperwork checklist in Washington, here’s a quick list of what you should obtain:

• Preliminary Title Report: This report shows if you have any outstanding title issues, such as liens and back taxes. If there are fees that need to be paid off, you can opt to settle them first or add them to your disclosures.
• Property Survey: This survey maps out the legal boundaries of your property. It may also include the locations of fences, driveways, and other structures built around or on the property. This document is often requested by potential buyers.
• Original Sales Contract: To show the house’s chain of ownership, you must prepare the original sales contract. This reveals all the terms and conditions of the property’s transfer and all disclosures before the original house sale.
• Mortgage Payoff Statement: If you haven’t settled your house’s mortgage, you need to get a mortgage payoff statement showing your payoff amount. Aside from your outstanding balance, this also includes fees and other interests.
• Homeowners Associations (HOA) Documents: HOA documents include information about certain rules, regulations, dues, and privileges that must be disclosed to the buyer if your property is a condominium or part of a housing development.
• Previous Utility Bills: Although optional, some buyers may specifically request for past utility bills to get an idea of how much they need to pay for electricity, water, and gas each month.
• Repair and Maintenance Reports: Presenting these documents reassures potential buyers that you put in the work to maintain your home. This can further convince them that the house is in good condition and ready for moving in.
• Seller’s Disclosures: This is a mandatory form that informs buyers about any damages and issues, like mold, leakage, and asbestos. The requirements for disclosure may vary depending on your state.

In some cases, buyers may also ask about the house’s floor plan or blueprint as well as warranties and receipts for appliances or home upgrades. It’s important to have them ready upon request.

Once you’ve compiled all the preliminary paperwork for selling a house by owner in Washington, make sure to have at least two copies of each, especially those pertaining to the house and the property’s ownership.

Listing Documents

After listing, you should prepare for possible offers, which involves a whole new set of paperwork to accomplish. The list below enumerates what you may encounter or need to fulfill:

• Purchase Offer: This document outlines the buyer’s offer and other terms for the deal. This includes the purchase price, down payment, closing costs, and target closing date and move-in. It’s in the seller’s discretion to accept, decline, or make a counteroffer.
• Purchase Agreement: This serves as a binding contract between the buyer and the seller, which states the final agreed-upon price, terms and conditions, earnest money deposit, and other important sales aspects.
• Home Inspection Report: Once the purchase agreement has been established, the buyer may ask to conduct a home inspection to evaluate the house’s structure, installed systems, and other features. Any issues that may be discovered can result in renegotiation.

Note: If the home’s address is in California, the seller is required to get a contingency removal form. This document requires the contingencies to be completed in order to finalize the purchase.

Closing Documents

In the final phase in Washington, both the buyer and seller will work closely with a closing attorney to close the deal. They may also bring their respective lawyers before and during the closing date to draft and review closing documents and ensure accurate distribution of payment after the sale.

Here’s an overview of the paperwork required at this final stage:

• Deed: The property deed is a document that proves the legal transfer of title or ownership from the seller to the buyer. This should be notarized and signed by the right authorities in your county’s record office.
• Closing Statement: Also called the settlement sheet, this form clarifies how much money the buyer receives after closing costs, taxes, and other transaction fees associated with the house purchase are accounted for.
• Property Tax Records: At the time of closing, sellers must also show their most recent tax statement to calculate any outstanding taxes that need to be paid. This also gives an estimate of how much the buyer needs to pay upon title transfer.
• 1099-S tax form: The Internal Revenue Service (IRS) requires home sellers to fill out a 1099-S tax form to specify any capital gains after the sale. However, there is a provision for those selling their main residence and earning a profit of less than $250,000 (if you’re single) or $500,000 (if you’re married).

The amount of paperwork that needs to be done to sell a house in Washington is staggering to say the least, but definitely not impossible. It is recommended to work with your lawyer to prevent legal issues.

Common Pitfalls in FSBO Transactions in Washington and How To Avoid Them

Choosing the FSBO path comes with hidden pitfalls. Due to the workload involved, some sellers can make rookie mistakes. After all, real estate transactions in Washington are naturally complex processes, demanding legal, financial, and negotiation skills.

Here are some common problems sellers encounter in FSBO deals and how to avoid them:

1. Guessing The Property’s Price

It’s quite common for homeowners to undervalue their property since they can’t estimate the value correctly based on current Washington market prices. This can result in substantial financial losses.

Meanwhile, overpricing can ward off potential buyers and can leave the house on listing for a longer time. To have a precise assessment in Washington, sellers can use online tools or find real estate comparables or “comps” to learn the prices of similar homes.

2. Insufficient Marketing Strategies

As an FSBO seller in Washington, it’s crucial to plan an effective marketing strategy that doesn’t just rely on traditional advertising methods. Newspaper ads and yard signs limit the exposure of your house for sale.

Taking advantage of the internet, especially social media, can help you reach a wider audience. Aside from listing websites, you can post on Facebook’s marketplace and other apps to get maximum visibility.

3. Unprepared For Showings

Showing your house can make or break a possible FSBO deal in Washington. If you don’t prepare your house prior to showing, this can leave a negative impression which could take away a potential offer.

Decluttering your home, installing good lighting, ensuring good ventilation and house smell, and repairing visible damages can increase your chances of a favorable deal. 

4. Lack of Legal and Real Estate Knowledge

An FSBO transaction in Washington requires knowledge of real estate laws and financial processes. Sellers must prepare all the legal documents like sales contracts and disclosure forms and also accurately calculate closing costs and taxations.

To navigate these intricate details, sellers must consult a real estate lawyer and financial experts.

5. Poor Negotiation Skills

Negotiation is a crucial skill for closing an FSBO deal in Washington. You don’t want to be too rigid with your final price or undersell your home. 

To avoid prolonging the sale or accepting less favorable offers, sellers must learn the aspects that come with the negotiation process like the terms of sale, closing dates, and handling counteroffers.

Key Takeaways: Managing FSBO Paperwork for a Smooth House Sale in Washington State

Selling a house by owner in Washington, or FSBO, offers homeowners the opportunity to save on real estate commissions and retain full control over the sale process. However, this approach comes with its own set of challenges, particularly when it comes to managing the extensive paperwork involved.

By understanding the key documents required—such as pre-listing paperwork, listing documents, and closing forms—Washington homeowners can navigate the FSBO process more effectively and avoid common pitfalls.

Additionally, being well-prepared and informed can help FSBO sellers successfully manage the necessary paperwork, mitigate risks, and achieve a smooth, profitable home sale in Washington.

For a quicker sale than going the FSBO route, reach out to Kind House Buyers! Contact us today at (253) 216-2497 to learn more!