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How to Draft a For Sale by Owner Contract

Author: Hogan Willig

May 24th, 2014

Spring is finally here! If you are selling your house without the aid of a real estate agent, here is some information you need to know. One of the most important things you will need to do is create a For Sale By Owner (FSBO) contract for you and the buyer. This document will explain the terms and conditions of the sale, as well as the obligations of each party. Here are a few things the contract must contain:

  1. It seems obvious, but make sure you state the names of the parties to the contract and note which one is the buyer and which one is the seller.
  2. Include a description of the property being conveyed. This should not only contain the street address, but also a legal description of the property, which can be found in the deed (the instrument that conveys legal ownership of the property from the seller to the buyer).
  3. Lay out the payment terms so that it is clear when the buyer will pay the seller and how much he or she will be paying. Also note what the purchase price is.
  4. List and describe any easements or other restrictions on the property. An easement occurs when the homeowner has granted another person the right to use a portion of the homeowner’s property. Common restrictions are those imposed by a homeowner’s association.
  5. Describe what property will be conveyed with the house. Usually, contracts will state that all plumbing, kitchen cabinets, heating, doors, windows, tool sheds, etc. will be included in the sale, while all furniture and kitchen appliances are excluded from the sale.
  6. List and describe all contingencies. These are conditions that must be satisfied before the contract is binding on the parties. The most common contingencies found in FSBO contracts are a buyer’s inspection contingency (where the buyer conditions closing on an acceptable home inspection) and a financing contingency (where the seller conditions the sale on the buyer obtaining a loan or other form of financing).
  7. Include required disclosures. New York law requires every seller to complete a standard property disclosure form, which can be accessed at https://www.dos.ny.gov/forms/licensing/1614-a.pdf. This contains 48 basic questions, such as: whether the property is located near a landfill, whether it is built upon a flood plain, and whether there is smoke or fire damage. In addition, if you are selling a house built before 1978, you must comply with the Residential Lead-Based Paint Hazard Reduction Act of 1992. This requires homeowners to disclose all known lead-based paint present in the house and provide the buyer with a pamphlet about lead-based paint by the EPA.
  8. One section should state that the seller will provide to the buyer, at least 15 calendar days before the closing date, a draft of the propose deed, abstract of title (this document describes a person’s legal relationship with the property), and an instrument survey map of the property.
  9. Include a section describing what will happen should one of the parties default. If the buyer defaults, the seller may retain the down payment. If the seller defaults, the purchaser may be entitled to specific performance of the contract.
  10. The contract should also provide for a period of time (called “escrow”) before closing, but after an agreement has been signed, so that inspections, disclosures, and financing may all be taken care of.
  11. Finally, there must be a signature block so that both parties can sign and have their signatures notarized.

Often times, people remodel and update their homes prior to putting them on the market. There are several steps you can take to protect yourself from unscrupulous home improvement contractors. First, you should research the permits and inspections that must be done before work can take place on your home. An easy way to do this is by contacting your local building and codes office. Second, make sure you obtain references from a potential contractor and verify the company is insured. That way, if a worker is injured on your property, you will not be liable. Finally, under New York law, all contractors are required to provide a written contract to the homeowner. Before signing, make sure this includes a timeline for the work to be done and a payment schedule.

Selling a home is a long and tedious process. Because complex legal issues often arise, it is always best to obtain legal advice before signing any contracts or agreement. If you are selling your home and wish to speak with an attorney, please contact the Real Estate department of HoganWillig at (716)636-7600.

Are You Thinking About Getting a New Mortgage?

Author: Bruce Ikefugi

February 8th, 2010

If you are refinancing or borrowing to purchase a home, loan cost is not the only issue to consider.


There has been a lot of publicity lately regarding the changes to the Real Estate Settlements Procedure Act which are designed to make it easier for borrowers to “shop” among lenders in order to obtain the very lowest cost loans.  I would like to point out that cost should not be your only concern.  Clients who have come to me after their loan closing with problems all seem to have their loans with huge national banks.  These banks, perhaps understandably given the volume they face, have problems tracking payments, loan assignments, and other matters.   One client, who had never been late or missed a mortgage payment, was accused by his national lender of missing one month’s payment.  They told him that if he did not pay it immediately or provide proof that it had been paid, they would begin foreclosure proceedings.  He had to do all of the legwork to prove that they received and cashed the payment, and he still had to wait “up to 45 days” for the bank to agree.  He was told that there were other borrowers in the same position regarding the same month, and that the problem may have arisen from the bank’s purchase of a loan portfolio, but nonetheless, the burden was on him to prove that the lender received the payment.  Similar problems arise when there is a need to prove that a mortgage with the national lender has been paid in full.  Again, it is usually up to the borrower to prove to the lender that he made all of the payments, even if it has been years since his final payment.


I have also seen that national banks (by the way, I do not include HSBC or M&T in this category for the purposes of this entry) have not treated our clients, who are experiencing financial difficulties, in an understanding or humane manner.  Most of our clients are content with the way they have been treated by their small, local lender.  It has been my experience that local lenders are very understanding and willing to help resolve foreclosure and payment issues.   I have not spoken with any big bank client who feels they have been well or fairly treated.


So, if you are refinancing or borrowing to purchase a home, give some additional consideration to your smaller local bank.

New York Property Deed

Author: Bruce Ikefugi

October 31st, 2008

A client recently shared with me an unsolicited offer he had received in the mail. The company offered to obtain (for a sizeable fee) a certified copy of the client’s deed of ownership to his property from the local county clerk. The offer stated that it was a good idea to have a copy of this valuable document, which is the single best indication that you own your own home. I agree with that statement, which is why all lawyers


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