• FSBO (For Sale By Owner): A real estate transaction conducted directly between the seller and buyer, without a listing agent.

• Purchase Agreement: A legally binding contract between the seller and buyer that outlines the terms and conditions of the sale.

• Seller’s Disclosure Statement: A required document in Michigan under MCL 565.951–565.966, where the seller lists known issues with the property.

• Lead-Based Paint Disclosure: A federal requirement for homes built before 1978, disclosing any known lead-based hazards.

• Earnest Money Deposit: A good-faith deposit made by the buyer to show serious intent to purchase the property.

• Contingencies: Clauses in the purchase agreement that allow either party to back out of the contract under specific conditions (e.g. financing, inspection).

• Deed: The legal document that officially transfers property ownership from seller to buyer.

• Title Search: A review of public records to ensure the seller has clear ownership and there are no outstanding liens or claims.

• Real Estate Transfer Tax: A Michigan tax imposed on the transfer of property ownership, governed by MCL 207.505 and MCL 207.526.

• Closing Statement: A financial summary of the transaction, showing where all funds are going at the closing table.

• Dual Agency: Not applicable in pure FSBO but good to know—this occurs when one agent represents both buyer and seller, which is prohibited or restricted in many cases.

Legal Considerations

• Fair Housing Act – Ensures pricing does not discriminate against buyers.
• Michigan Real Estate Transfer Tax Act – Imposes taxes on property transfers.
• Occupational Code (Article 25) – Regulates real estate brokers and salespersons.

Q: What are the risks of handling FSBO paperwork without an attorney?

A: Without legal guidance, you could overlook critical disclosures, misinterpret state laws, or draft incomplete contracts. These missteps can lead to delayed closings, financial penalties, or potential lawsuits—even if unintentional.

Q: How can an attorney help make my FSBO sale legally secure?

A: An experienced real estate attorney ensures every document complies with Michigan law, including the Seller’s Disclosure Statement, purchase agreement, and deed. They review title issues, prepare legally enforceable contracts, and walk you through the closing process to avoid costly errors.

Q: Isn’t using an attorney expensive for a simple FSBO transaction?

A: While there is a cost, it’s minor compared to the potential consequences of doing it alone. An attorney like Ann Howard—who’s spent decades helping FSBO clients—can often save you money by preventing disputes, tax errors, or voided sales. It’s an investment in peace of mind and legal protection.