How to sell a house by owner in California

Want to sell your California home without having to pay a real estate agent’s commission? You can always go the DIY route by marketing and selling your home yourself — what the industry refers to as “for sale by owner,” or FSBO for short. According to a 2023 study by the National Association of Realtors (NAR), 10 percent of home sellers opt for this strategy.

But before you take the FSBO plunge, you should know that selling a home without the help of a professional is a lot of work. In addition, while you may bypass the seller’s agent commission fee, you will still be on the hook for your buyer’s agent’s fee — and you could end up pocketing less profit on the sale too. Explore how to sell a house by owner in California, along with the work involved and all the pros and cons, below.

How to sell a house by owner in California

Homeowners who choose to pursue a FSBO sale in California, or any other state, will need to handle all the responsibilities that a real estate agent otherwise would. This means managing a wide array of tasks, from research to marketing to negotiations. Let’s break down each of these responsibilities.

Create a listing

To list your California home on the market, you must first create a listing. This requires writing an appealing text description of the property to attract potential buyers, making sure to cover essential details like age, square footage, lot size and number of bedrooms and bathrooms. Be sure to highlight any special features the property has — in California this could include a swimming pool, a coveted water or mountain view or a charging station for electric cars, for example — as well as information about the neighborhood and schools.

High-quality listing photos are also crucial: According to NAR data, 96 percent of homebuyers look at listings online, and you don’t want them to click away if they don’t see a great image. Consider videos too, and think about enlisting a professional photographer to make sure the job is done right.

The most critical part of the listing, of course, is setting the right asking price. The median sale price on single-family homes sold in the Golden State in August 2023 was $859,800, according to data from the California Association of Realtors. Prices varied widely across the state, though, from $1.26 million in the San Francisco Bay Area to $369,000 in the Far North, their data shows. So be sure to do your due diligence, as a Realtor would, and carefully analyze comparable home sales in your local area. Be honest and realistic when evaluating your home’s desirability compared to others — you don’t want to leave money on the table, of course, but you also don’t want to swing for the fences and end up having to reduce the price multiple times.

Market your property

After crafting your listing, the next step is to ensure it’s visible to potential homebuyers. Many online platforms allow California FSBO sellers to list their home on the local MLS for a flat fee, including Beycome, CA Flat Fee and Homecoin. Some sites have packages that include marketing materials like yard signs, as well.

Additionally, you can promote your home with flyers, on social media channels and via platforms like Craigslist, Facebook Marketplace and Nextdoor. Exercise caution when sharing information online, though, to avoid attracting scammers or other potential risks.

Marketing also involves opening your door to potential buyers, either through open houses or private showings. Not only can these be tricky to schedule, but they also involve a level of risk — take precautions and make sure your home is clear of valuables when you have strangers inside, and it’s probably smart to ask a friend or family member to be there with you, too.

Close the deal

Ideally, your well-crafted listing and savvy marketing work means you will receive an offer on your home (or maybe even a few!). Negotiations and seller concessions might be necessary to reach an agreement, and without an agent, navigating those tasks will fall to you.

The services of a real estate attorney can be invaluable to FSBO sellers, particularly when it comes to drafting the purchase contract and overseeing the closing process. A well-constructed contract is pivotal for a successful sale, and if you have no lawyer, it will fall on you to draw up the contract. There will also be a multitude of additional documents requiring your signature. While California does not require sellers to have legal representation, as some states do, the investment in a lawyer is worthwhile to ensure your interests are covered and your deal is legally sound. (More on this below.)

Required documents and disclosures for California home sellers

When you sell with a Realtor, they know the local laws and make sure the necessary paperwork is taken care of. With a FSBO sale, that’s your responsibility. “Seller disclosures will vary by region throughout California — for example, some counties or cities in the Bay Area have their own specific requirements for disclosure documents when selling a home,” says Nick Narodny, founder/CEO of Aalto, a San Francisco-based digital real estate platform.

California sellers must provide the homebuyer with several disclosure documents, including:

• A statewide buyer and seller advisory form, which breaks down the obligations for both parties.
• A transfer disclosure statement that answers questions and informs the buyer about a broad range of topics, including the condition of the property and any problems that have cropped up.
• A Megan’s Law disclosure, which gives access to a database of information about the area’s registered sex offenders.
• A disclosure of natural and environmental hazards, which provides information about how prone the area is to flooding, fires and earthquakes, among other things. Be prepared, as well, to provide a flood zone statement and a lead-based paint disclosure (for homes built before 1978).

In addition, some of the transactional paperwork required by the state of California can include:

• A closing statement, detailing all the expenses linked to the sale and who pays for what.
• A copy of the sales agreement, with any addendums or mutually agreed-upon modifications.
• A bill of sale that outlines the final home price and the items covered in the sale.
• A notarized affidavit of title.
• An executed deed, which allows the lawful transfer of property ownership.

If this all seems pretty complicated, that brings us to our next step:

Do I need a lawyer to sell a house by owner in California?

In California, it’s not mandatory for home sellers to engage a lawyer, regardless of whether or not a Realtor is part of the process. But if you’re selling without a professional agent to guide the way, a lawyer is highly advisable. The regulations, contracts, and disclosure documents here can be very complex, and given the financial implications — which are substantial in a state where the median sale price is more than double the national median —  you don’t want to risk a mistake. Enlisting the expertise of a local real estate attorney helps guarantee your transaction’s validity and safeguards your best interests.

Pros and cons of selling a house in California without a Realtor

Selling your home on your own can be a good option for those who have sold a home before, or have a high level of knowledge and confidence. However, it has serious disadvantages too, especially for first-timers.

Pros

• You’re in charge: When you choose the FSBO path, there’s no one else telling you what to do. You hold the reins and navigate the process according to your own preferences.
• You’ll save on commission: Sellers typically pay the commissions of both agents involved in the transaction, which amounts to somewhere between 5 and 6 percent of the home’s sale price, split between the two. On a median-priced $859,800 California home, 6 percent comes to more than $50,000. So with no agent representing you, that’s one less commission to pay, which could save you $25,000. (But keep in mind that you’ll still have to pay your buyer’s agent.)
• You simplify the process: Realtors usually manage multiple clients at once, meaning you might not be their sole priority in terms of returning calls, preparing paperwork and answering questions. When you handle things directly, there’s no third party to coordinate with and you’re not tied to someone else’s schedule, which can speed up your timeline.

Cons

• There’s a lot more effort involved: Choosing the right price, crafting a compelling listing, marketing to potential buyers, coordinating showings, preparing paperwork: All of these are tasks that, in the absence of a real estate agent, you will have to do yourself.
• You won’t have professional guidance: Real estate agents are licensed pros who must take classes and pass exams to be certified. They also have a thorough understanding of their local markets that non-experts are unlikely to match.
• You’ll likely sell for less money: NAR data has shown that homes sold by owners tend to fetch lower prices than those sold through agents. In 2022, the median sale price with agent assistance stood at $345,000. Conversely, FSBO homes had a median price of $225,000. That equates to about 35 percent less.
• The buyer pool may be smaller: Buyers usually rely on agents to help them find suitable homes, and agents actively promote properties to each other. Without such assistance, your listing might receive fewer views. Notably, NAR data indicates that in 2022, half of FSBO sellers already knew their home’s buyer.

FAQs

• Can I sell a home in California without hiring a Realtor?

  Yes, you are legally allowed to list, market and sell your home in California without being required to hire a Realtor, agent or broker. But keep in mind that doing so is quite a lot of work.
  

• Will I save money by selling my house in California without a real estate agent?

  Yes, but perhaps not as much as you think. By selling your house without a Realtor, you can save the typical seller’s agent commission, which is around 2.5 to 3 percent of the home’s sale price. On a median-priced $859,800 California home, 3 percent comes to more than $25,000, a significant savings. However, you will still have to pay your buyer’s agent’s commission, and FSBO sales often bring in lower overall purchase prices than agent-assisted transactions.