The traditional way of selling real estate continues to change exponentially because of 1) a general dislike of real estate agents, 2) the desire to not pay a 6% commissions 3) the desire for more transparency in the sale transaction 4) the desire for more control in the real estate transaction 5) many of the functions the real estate agent traditionally performed in the marketing of properties can now be performed without the necessity of a real estate agent 6) lack of housing inventory has created a situation where the demand for properties far exceeds the supply of properties making it much easier for sellers to find a buyer.

This section will address 4 different types of Real Estate contract scenarios. Each include different requirements in terms of closing costs, inclusion of title company, timing in changes of ownership, speed of production, right of cancellation, and many other variables. This section is directed specifically to FOR SALE BY OWNER clients, however, we are a real estate brokerage and would be happy to list your property for sale in a broker/agency capacity should you decide you are ready for someone else to take responsibility for finding a buyer or seller. We offer discounts on full service MLS listings.

In a FOR SALE BY OWNER transaction a seller has found a buyer without the assistance of a real estate agent, or a buyer has found a seller without the assistance of a real estate agent. Trulia, Zillow, Realtor.com, and other real estate websites now enable individuals to market their property for sale without the necessity of hiring a real estate agent. This is a fairly new approach to real estate sales that was simply not possible in the past. In the past the only way to market a property was a sign in the yard, conduct an open house, and hire a real estate agent to enter the property into the Multiple Listing Service which is a paid website designed for real estate agents and real estate brokerages. Today an unrepresented seller or buyer has access to practically 100% of the same information that a real estate agent and brokerage does. This has created a trend in the industry of sellers testing the market first before hiring a realtor through internet real estate sites that are specifically designed to serve that function.

Often non-represented sellers successfully find a buyer but do not know what to do next, or an
unrepresented buyer has found a seller and does not know what to do next. Traditional Realtors are paid a commission when a sales transaction occurs. Traditional brokerages charge 3% on the listing side and 3% on the buyer broker side. They do not fill out forms for FSBO clients because they are SALES AGENTS and because their brokers will not allow them to act in that capacity.

Also, because they are not attorneys they are required to have agency agreements executed (in order to avoid acting in the capacity of an attorney) and other forms which do not envision an FSBO transaction. Its just not what realtors do.

Buyers and sellers recognize the value of avoiding 6% commissions and believe they can perform many of the same functions of a realtor. While it would be impossible for non-licensees to perform all acts of a realtor, the seller can do just enough to attract a ready and willing buyer, and a buyer can do just enough to attract a willing and able seller and reach agreement on basic terms. It is at this point that our services can be very beneficial to the FSBO process. We draft the real estate contract and take the sale all the way through closing, paying attention to the wants and needs of the buyer and seller.?Agreements are reached on sale price, earnest money, inspections, appraisals, repairs, closing date, and title company to use. We have one title company we use in Kansas and one title company we use in Missouri. Our ongoing relationship with the title companies means your not just another person with
the title company and every effort therefore is made to ensure a smooth and successful sale transaction. Title companies are weary of unrepresented FSBO clients because they know that many of the usual checks and balances may not have occurred increasing liability and work. When they know our firm is representing the parties to the sales transaction they have the assurance that the necessary checks and balances have occurred and that they have one point of communication on all matters relating to the sales transaction. Also, because of our continuing relationship they know what to expect from the?beginning which reduces or eliminates uncertainty through the process.

The advent of these real estate marketing websites had been very disruptive to the traditional real estate model of hiring a real estate agent and paying the commissions associated with a real estate broker to broker sale transaction. In the traditional real estate sales model there is a listing agent and a buyer agent. The commission is typically 3% of the sale price to the listing agent and 3% to the buyer agent for a total of 6% of the sale price. Sometimes the listing agent acts in both the capacity of a listing agent and a buyer agent in the case of a listed property and a buyer that is unrepresented.

If you are a buyer – It is critical to understand that in cases where there is a listing agent but the buyer is unrepresented the listing agent collects the entire 6% commission! If you are a buyer and buying a property that has a listing agent make sure to hire a buyer agent to represent you as a buyer because you are paying the 3% buyer broker commission to the listing agent even if you do not have an agent representing you! As a real estate brokerage we can represent you as a buyer for a discounted amount and return the difference in savings to you.



In a traditional MLS sale there is agency representation (a realtor is involved). A listing agent can represent both the seller and the buyer as a transaction agent or as a disclosed duel agent.? No amount of the purchase price is being financed by the seller. Ownership changes completely at closing. The buyer brings funds to closing and the seller takes funds away from closing. A warranty deed is given to the buyer at closing and the buyer obtains an owners title policy that insures clear and marketable title.

Typically, a bank is financing all or part of the purchase price (although that is not necessary). Because a bank is involved, the bank will require appraisals and inspections to be conducted and will require a lenders title policy be issued which is an insurance policy insuring clear and marketable title.

The property is listed on the Multiple Listing Service and offers are received by the seller. The seller fills out a disclosure statement, and sales price can be renegotiated based on the outcome of inspections or the contract can be cancelled based on the outcome of inspections.

Yes – Agents, Title Company, Title Insurance, Recordation, Bank, Appraisal, Inspection, Multiple Listing Service, Contractors, Right to Cancel absolute unless a separate in its present condition addendum is signed.

No ? N/A

Time Frame ? 45 to 60 Days


In a non-traditional MLS sale there are no real estate agents involved but there is a change of
ownership in title, title insurance, recordation, bank involvement, and essentially all the other things that are included in a traditional MLS sale ? the only difference is there are not agents involved. No amount of the purchase price is being financed by the seller and a bank is executing a promissory note and deed of trust to be executed at closing.

Yes – Title company, Bank, Inspection, Appraisal (optional), Contractors (optional) Right to Cancel (optional)

No ? Agents, Multiple Listing Service


As the name indicates, this involves the seller financing the entire purchase price. A contract for deed or installment sale contract is signed and recorded. However, full legal ownership does not technically change until all payments under the contract are made at which time the buyer is given a deed. A title company is used (optional). In the event of default on payments a foreclosure action must be conducted to clear title.

Yes ? Real Estate Contract (contract for deed) Title company(optional), Inspections and Appraisal (optional)

No -Agents, Bank, Right to Cancel


This has all the same elements of a traditional owner finance except there is no recording of the contract with the recorder of deeds office. The effect of not recording is the buyer does not have a recorded legal OR equitable interest in the property. Because there is no Legal OR equitable interest in the property there is no requirement to conduct a foreclosure if default in payments occurs.

Yes ? Real estate contract (contract for deed)

No ? Agents, Title Company, Inspections, Appraisals, Bank, Right to Cancel