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How to Sell a House by Owner in California (2023 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, we always recommend that you look into the local regulations for your area and consult with a qualified legal professional before taking action.

The median price of a California home hit $777,500 in November 2022, which is a 3% decrease from the previous month, a sign that higher interest rates are slowing the real estate market in California. Moreover, homes are sitting on the market for longer and inventory is increasing. With such impressive sales figures, some sellers may be curious about how to sell a house by owner in California — a decision that could help them save on agent commissions.

Sellers who may have been wondering about how to sell a house in California by owner 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. California is also 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.

For example, 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.

In this guide on how to sell a house by owner in California, 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 the FSBO process in California. 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 Fasts for Selling a House in California

Average home price in California: $777,500 (November 2022)
Average time on market: 24 days (November 2022)
Can FSBO sellers post a yard sign? While for sale signs are generally permitted, local regulations may govern the size and placement of signs.
Is a real estate attorney required? California state law doesn’t require an attorney to sell a home; 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 California? California has the Transfer Disclosure Statement and Seller Property Questionnaire, Natural hazard disclosure (NHD) expert’s report and accompanying NHD Statement, and several other disclosure forms that may be applicable to your specific property and sale.
Real estate transfer taxes? Local optional transfer tax of $0.55/$500

Quick 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 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. As reported in HomeLight’s Top Agent Insights report for Fall 2022, 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. A few common issues with California homes include:

  • Worn Roofs: Sunlight can wear on a roof, and California homes are known for soaking up the sun. In fact, California sees the 5th most sunshine in the United States. That means it’s a good idea to make sure your roof isn’t warped or damaged before you sell on your own.
  • Foundation shifting: With tectonic plates slicing through the state, it’s no wonder that foundation problems pop up often during California home inspections. Be sure to check your foundation for cracks and keep an eye out for other potential earthquake damage, such as uneven floors or wobbly counters.
  • Water Damage: Water damage may not be a problem throughout the whole state, but it’s common in wetter coastal areas and Southern California. Before you sell your home, make sure your house isn’t hiding rusty pipes, corroded metal, or other side effects of heavy moisture.

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), as it 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 are 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.

Review the list of possible disclosures directly from the California Association of Realtors if you want to get familiar with them.  A real estate attorney can provide a FSBO seller with legal guidance to complete 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, 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.

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. 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.”

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 $100-$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 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 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 3-D 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 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 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%).

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 (Seller Counter Offer – C.A.R. Form SCO for sellers, and (Buyer Counter Offer – C.A.R. Form BCO for buyers) provided by the California Association of Realtors to continue negotiations. Either party can withdraw a counteroffer 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 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).

To reduce the risk of errors for 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 $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 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:

  • 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.

California is a “dry funding” state, meaning that “all parties get together to sign mortgage documents, but all of the paperwork required to officially close the loan doesn’t have to be completed at that time. Most importantly, no mortgage funds are distributed to the seller on that day,” according to mortgage company CMG Financial.

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 a local optional transfer tax, so rates can vary), 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.
Who is buying homes in California?

  • Retirees: California draws in people looking for a second home, vacation spot, or place to explore the outdoors.
  • Move-up buyers: California buyers are often local homeowners looking for a home upgrade or who are ready to move into a larger home.
  • Established professionals: California attracts career enthusiasts who want to live near financial, technology, and other high-end business hubs.

Challenges California 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.

“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 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 California 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.

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 Buy Before You Sell.

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 Buy Before You Sell allows you to buy a new home with confidence before selling your old one. HomeLight will provide a guaranteed offer price on your old home, freeing you up to bid on the home of your dreams with sales contingency, increasingly the likelihood that you will close. This means you’re more likely to close and can do so on your timeline.

You can even tap into your home equity to help cover your downpayment on your next home. HomeLight can provide a downpayment loan on your new home.

When you have an offer accepted on a new home, you and your agent then list your old home. If that home doesn’t sell within 90 days of closing on your new house, HomeLight will buy it for the guaranteed offer price. HomeLight can advance funds to cover the mortgage payments on your old home until it sells at no added cost. If the home sells for more than we paid for it, we give you the additional proceeds minus selling costs and program fees.

Option 3: Hire a top California 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 California home goes smoothly! You’ve certainly picked a great time to sell.

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