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How to Sell a House by Owner in Texas (2022 Updates)

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

Disclaimer: HomeLight does not provide legal advice. While this is a general guide to selling a house by owner in Texas, we always recommend that you look into the local regulations for your area and consult with a qualified legal professional before taking action.

With people flocking to Texas for its mild weather and low taxes, Texas home prices saw impressive gains over the last few years. Higher interest rates, however, have been cooling the housing market nationwide, and real estate in Texas is no exception. Inventory is starting to rise along with the average number of days on market as of September 2022, while sales volume has declined.

Sellers who may have been wondering about how to sell a house by owner in Texas during the hot seller’s market of 2021-2022 may now face stronger headwinds and more discerning buyers.

Often, the decision to go for sale by owner (or, “FSBO”) is motivated by a desire to save on agent commissions. While FSBO can work, it does come with some risks, including the possibility of selling your house for less than market value.

In this guide on how to sell a house by owner in Texas, we’ll cover what can be the most difficult aspects of selling by owner, including the steps that might be harder than you think. We’ll also provide a comprehensive overview on the full process to prep, market, and close on your home without the assistance of a real estate agent.

Note: Once you’ve seen what’s required, you can roll up your sleeves and get started with your FSBO sale in Texas. Or — in the event you’d prefer to work with a real estate agent — HomeLight would be happy to introduce you to highly-rated professionals who can help you command top dollar and provide a low-stress selling experience. 

Fast Facts About Selling a House in Texas

Median sales price $346,000 (September 2022)
Average days on market 42 days (September 2022)
Are FSBO yard signs allowed? Regulations governing signs, including sizing and placement, are determined at the local level.
Is a real estate attorney required? Real estate attorneys are not considered essential for closing in Texas. However, it’s almost always recommended to involve the expertise of an attorney when selling FSBO to prevent a potential abundance of legal risk.
What are sellers required to disclose in Texas? The seller’s knowledge of the condition of the property must be documented in the Texas Real Estate Commissions’ Seller’s Disclosure Notice
Real estate transfer taxes? None

FSBO overview

FSBO is a method of selling your home without the involvement of a listing agent. In a FSBO scenario, the seller assumes the responsibilities that would normally fall to their agent such as pricing the home, arranging showings, and negotiating the deal.

In an agent-assisted sale, the seller typically pays a commission amounting to around 6% of the sale price, which is then split 50/50 with the buyer’s agent. That 6% is deducted from the seller’s proceeds at closing. By selling FSBO, a seller can eliminate the cost of the listing agent commission (so around 3%), though they may still need to offer a buyer’s agent commission.

Finally, a FSBO sale does not mean that a seller won’t need any professional assistance. Most people who sell by owner will need to hire an attorney to review and prepare key documents and make sure paperwork is filled out properly, such as the seller’s disclosures and purchase contract.

How to sell a house by owner in Texas

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.

Step 1: Address needed repairs and maintenance

FSBO sellers in Texas 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.

Here are few problems commonly found in Texas homes:

Foundation issues

Due to its shifting soil, the Lone Star State ranks high on the list of states that get saddled with these types of problems. In GroundWorks’ list of the top 15 metro areas with foundation issues, Texas cities occupied eight of those spots. San Antonio landed the #2 spot, largely due to its large amount of clay soil, which tends to shift and settle.

HVAC problems

Texas temperatures can vary widely, but you can bet on sweltering summers, with highs often rising above 100 degrees. Soaring temps mean the air conditioning has to work longer and harder, which can take a toll on HVAC systems.

Roof repair or replacement

Texas might be best known for its hot, arid climate, but it can also experience cold winters, hurricanes, hailstorms, tornadoes, and thunderstorms, as well as the threat of wildfires. All of these potentially extreme conditions can wreak havoc on a home’s roof, especially when it was created with a less than durable or resilient material.

Plumbing problems

The heavy rainfall in Texas can cause ground movement around the slab of a home, in turn disrupting the pipes and causing leaks. In addition to the skyrocketing water costs, the leaky pipes can be expensive to repair or replace.

Step 2: Fill out your disclosure forms

Texas requires that sellers disclose known material facts and the physical condition of a property to buyers. The Texas Real Estate Commission created the Seller’s Disclosure Notice, which allows sellers to report all conditions that Texas law requires be disclosed.

The form asks for information about the condition of all physical aspects of a house, such as windows, the roof, walls, the foundation, and the electrical system. It also asks sellers to disclose environmental information about location within a groundwater conservation district, about past flooding, a home’s location in a flood zone, and whether the owner presently has flood insurance.

Appliances are also covered by the form, as are questions about smoke detectors. This is a snapshot of some of the questions sellers need to answer. You may consider engaging the expertise of a real estate attorney to assist in this step in the process to reduce potential legal risk. A good time to fill out your Texas property disclosure is prior to listing your home so that you know it’s taken care 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, a HomeLight survey of top agents shows an estimated price increase of $1,728 for deep cleaning and $2,584 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. One survey of Realtors® found that staging can increase the sales price of a home by 1% to 5%, and 31% agree that a staged home sells significantly faster.

Finally, don’t forget about the outdoors. Data from HomeLight’s 2022 Top Agents Insight Report shows that on average, “Buyers will pay 7% more for a house with great curb appeal versus a home with a neglected exterior.”

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?

Step 4: 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 Texas 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 Texas 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 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 of your home to provide a professional and independent opinion of value. Appraisals usually cost between $500-$600 and getting one doesn’t mean that a buyer’s lender won’t require a separate and independent appraisal before closing. But it can reduce some of the stress of pricing your home for sale since appraisers are licensed and trained for this work.

Step 5: Arrange for professional photography

For $100-$300 per shoot, FSBO sellers should consider the copious benefits of getting professional photos to include in their listing. 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 three weeks faster and bring in up to $11,000 more than their houses marketed without professional photos.

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

  • Drone photography. Getting an aerial view of the property can help buyers see the location and layout. 79% 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 2-D or 3-D floor plan image allows buyers to see spatial relationships regarding how the home is connected.

Research shows that 51% of buyers find their homes via the internet. That means your home’s visual online presence is important! Even the best cell phone pictures can’t compete with professional images.

Note: When selling a house by owner in Texas, 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 3-D tours as well as part of their listing package.

“FSBO sellers often believe they’re eliminating the fees by doing it on their own — but they’re going to have to do their own marketing,” explains Maribel Frey, a top real estate agent in San Antonio.

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. Data indicates that 42% of FSBO sellers use online outlets, 26% set up yard signs, and 23% 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 (usually around $100-$200), or you can employ a listing service that will charge a percentage of the sales price for services that include MLS access.

However, keep in mind that when posting on the MLS, a buyer’s broker commission will be required and the commission rate will need to be provided upfront upon entering into the MLS (an average of 2%-3%).

Who’s Buying Houses in Texas?

  • Out-of-state, first time buyers looking for homes close to their jobs or near good schools
  • Second-time homebuyers looking to downsize or upsize
  • Investors in Texas are looking to make all-cash offers on properties they can flip or turn into rental properties

Step 7: Field and negotiate offers

Hopefully your marketing efforts lead to one or more offers on your Texas 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.

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 on with the purchase if the results of the inspection weren’t satisfactory (unless they waived the home inspection contingency).

Closing date

Closing dates can be subject to negotiation as well. 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).

Remember that even if you come to terms with your buyer verbally at first, you’ll want to put the offer in writing using a residential real estate purchase contract, like this one that is specific to Texas. A purchase contract is a legally binding document that protects the interests of both the seller and the buyer by specifically outlining expectations prior to closing.

To reduce the risk of errors for your sale, 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 $450 per hour.

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 Texas, real estate transactions are typically closed by escrow agents or title companies.

In Texas, the buyer and seller can each propose their title company of choice but must ultimately agree on which company to work with to close the deal, according to National Title Group. Due to the hot seller’s market, buyers have been more likely to offer to cover the title fees which sellers used to typically pay in Texas.

Before the deal is final, you can expect the following next steps to occur:

  • Complete the home inspection, usually within five days to a week of signing the purchase agreement.
  • Negotiate inspection items (if applicable).
  • Complete home appraisal by a third-party independent appraiser (necessary if your buyer is using a mortgage).
  • Negotiate appraisal results (if applicable).
  • Buyer completes final walkthrough to ensure the home is in “broom clean” condition, which means swept, vacuumed and free of debris and excess stuff.
  • The buyer will also ensure that no damage has been done to the property since their last visit.

Step 9: Close the sale

Texas is a “wet close” state, meaning that “ all of the paperwork needed to officially close the loan must be completed and approved on the exact day of loan closing,” according to mortgage company CMG Financial. –– or while the ink is still wet, so to speak.

That means all financial transfers will be made and property ownership will officially change hands at the time of closing or within a few days after.

Be aware that closing as a FSBO seller does not mean that you avoid all closing fees. Common seller closing fees include prorated property taxes and settlement fees. This can amount to around 1%-3% of the sale price. Unlike the majority of states, Texas does not charge a real estate transfer tax.

If a buyer uses an agent, a seller may also be asked to pay all or part of the buyer’s agent commission. Consult our guide on who pays for closing costs when selling a house by owner for more details.

Next steps 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.
  • 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 Texas FSBO sellers face

Some tenacious sellers may not bat an eyelash at the steps outlined above. But many FSBO sellers find the actual execution a lot more challenging.

The possibility of underselling the home is one major concern. The National Association of Realtors (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 $260,000 last year, significantly lower than the median of agent-assisted homes at $318,000.” An independent study from 2016 to 2017 bears this out: FSBO homes sold for an average of 5.5% less than agent-marketed sales.

FSBO sellers also predominantly sell to a friend, family member, or neighbor. The same dataset from NAR shows that 51% of FSBO sellers knew their buyer, compared to 8% of all sellers. In addition, 22% of FSBOs occur in a rural area where residents may be more likely to know one another, compared to 15% of general home sales.

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

  • Preparing the home for sale (17%)
  • Setting an accurate price (14%)
  • Understanding and performing paperwork (11%)
  • Selling within the planned length of time (5%)

Alternatives to selling a house by owner

There’s more than one way to sell a house. In addition to FSBO, below we list out a few of the methods available to Texas sellers.

Option 1: Request a cash offer for your home

Another option for selling a house without a real estate agent is to work with an investor or house buying company purchasing homes for cash in your area.

Saving on commissions is often top of mind for FSBO sellers, and selling your house for cash is another option where you can do that. A cash transaction can usually be turned over in as little as a week to two weeks, as it allows you to skip the mortgage process and the appraisal, which are typically the two most time-consuming steps.

If this option interests you, consider requesting a cash offer through HomeLight’s Simple Sale platform. With Simple Sale, sellers receive an all-cash offer in as few as 48 hours — you can reduce the time and money spent on marketing the home FSBO. Sellers using the Simple Sale platform can close in as little as 10 days and have flexibility in selecting a move-out date.

Due to the relatively high number of investors looking to purchase in Texas, sellers may find that online cash offers come in at a competitive number. In fact, cash purchases are on the rise in Texas, with a 28.7% increase year over year in January 2022.

That said, it’s important to know that investors typically pay under market value for the homes they purchase, and sometimes significantly so. 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: Consider HomeLight Trade-in

If you’re trying to sell your current home in order to buy a new one, you may realize that timing both deals right is going to be tricky. Many people need the funds from their sale to come in first, in order to complete the purchase of their new home. FSBO can complicate that timeline because of the extra time and hassle required.

HomeLight Trade-In allows you to buy a new home before selling your old one. We work with your real estate agent to make an offer on your current home, freeing you up to bid on the home of your dreams with no lending or home sale contingency. This means you’re more likely to close and can do so on your timeline.

When you have an offer accepted on a new home, we then buy your current home at the purchase price so you receive the cash to close. Then we complete the process by working with your agent to list your previous home. If the home sells for more than we paid for it, we give you the additional proceeds minus selling costs and program fees.

For more information on how HomeLight Trade-In can work for you, begin with this contact form.

Option 3: Hire a top Texas real estate agent

As explored earlier, research shows that agents statistically help homes sell for quite a bit more, helping to offset or even exceed the amount paid in commission fees. And they do it while wrapping your entire listing and selling process in absolute professionalism.

Work with a top-rated agent, and 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 Texas home goes smoothly! You’ve certainly picked a great time to sell.

Header Image Source: (Pete Alexopoulos / Unsplash)