Selling your home “For Sale By Owner” (FSBO) in Michigan can save you thousands in agent commissions—but it also means you’re responsible for every legal detail. If your documents aren’t properly prepared or filed, the consequences can be serious: delayed closings, voided sales, or even lawsuits. Let’s break down what can go wrong and how to avoid it.

Real-World Legal Consequences

Improper FSBO paperwork has led to civil disputes across Michigan. In Mike Jadan v. Glenn F. Neville (2021) (PDF), a disagreement over a real estate transaction escalated into litigation due to unclear contract terms and alleged misrepresentations. While not every case makes headlines, many involve:

• Failure to disclose known defects, violating the Michigan Seller Disclosure Act MCL 565.951–565.966, which can result in the buyer canceling the sale or suing for damages.

• Incorrect or missing deeds, which can invalidate the transfer of ownership.

• Unfiled or misfiled transfer tax forms, leading to penalties under MCL 207.505 or MCL 207.526

• Improper service or contract execution, which can void the agreement or expose you to claims of fraud or breach of contract.

In one notable case, Holliday v. Townley, the Michigan courts emphasized that improper service of legal documents can undermine jurisdiction and render judgments void—a cautionary tale for FSBO sellers who try to handle legal filings without guidance.

Common Mistakes in FSBO Transactions

• Using outdated or generic templates for purchase agreements.

• Failing to provide the required Seller’s Disclosure Statement before signing.

• Not resolving title issues or liens before closing.

• Misunderstanding legal terms or omitting key contingencies.

• Skipping professional deed preparation or filing.

Why Legal Help Matters

Even if your sale seems simple, the legal framework behind it isn’t. A single missed disclosure or misworded clause can unravel the entire deal. That’s why Attorney Ann Howard, based in Southfield, Michigan, is a trusted ally for FSBO sellers. With over 30 years of experience in real estate law, Ann ensures your documents are complete, compliant, and enforceable. From drafting contracts to filing deeds and disclosures, she helps you close with confidence—avoiding costly mistakes and legal headaches.

Here are a few Michigan cases that highlight the legal pitfalls FSBO sellers can face when documents aren’t properly handled:

William Allen v. Robert A. Nofz (2022)

This case involved a boundary dispute between neighbors. The plaintiffs claimed ownership of a strip of land based on adverse possession and acquiescence, arguing that both parties had treated a certain line as the boundary for over 15 years. The court ruled in favor of the plaintiffs, emphasizing that longstanding informal agreements can override legal descriptions if not properly documented and challenged.

FSBO takeaway: If you’re selling property with unclear boundaries or shared features (like driveways or fences), failing to disclose or document them properly can lead to litigation—even years later.

(Link)

Holliday v. Townley (Referenced in legal commentary)

Though not a traditional FSBO case, this dispute emphasized how improper service and execution of legal documents can void agreements. In FSBO sales, if contracts or notices aren’t properly delivered or signed, the entire transaction can be challenged.

FSBO takeaway: Legal formality matters. A handshake deal or DIY contract might not hold up in court. (Link)

Hidden Costs in FSBO Transactions

While not a court case,Thompson Legal outlines how FSBO sellers often underestimate the legal and financial risks of going it alone. From misfiled deeds to incorrect transfer tax filings, these oversights can lead to delays, penalties, or even failed sales.

Here’s a list of Michigan Laws and descriptions that are relevant to FSBO (For Sale By Owner) real estate transactions.

• Michigan Seller Disclosure Act (MCL 565.951–565.966) Requires sellers of residential property (1–4 units) to provide a written disclosure statement to prospective buyers before signing a purchase agreement. This includes known defects, structural issues, and environmental hazards. 
• Real Estate Transfer Tax Act (MCL 207.505 & MCL 207.526) Imposes a state and county tax on the transfer of real property. Sellers are typically responsible for paying this tax when recording the deed.
• Occupational Code – Real Estate Practices (MCL 339.2501–339.2518) While FSBO sellers aren’t licensed agents, they must still comply with fair dealing standards. This section outlines ethical practices and prohibited conduct in real estate transactions. 
• Recording Requirements for Deeds (MCL 565.201) Specifies how deeds must be executed and recorded with the county Register of Deeds to be legally valid. 
• Marketable Record Title Act (MCL 565.101–565.106) Helps clear old claims or interests in property titles that are more than 40 years old, ensuring clean title transfer. 
• Truth in Renting Act (MCL 554.631–554.641) Applies if the FSBO transaction involves rental property. It prohibits certain lease clauses and ensures tenants are informed of their rights.
• Lead-Based Paint Hazard Reduction Act (Federal, but enforced in Michigan) Requires disclosure of known lead-based paint hazards in homes built before 1978. While not part of the MCL, it’s a critical legal requirement for FSBO sellers.

Q: What happens if I forget to provide the Seller’s Disclosure Statement?

A: You could be sued for nondisclosure, and the buyer may cancel the sale. Michigan law requires this document under MCL 565.951–565.966.

Q: Can I write my own purchase agreement?

A: You can, but it’s risky. Without legal review, you might omit essential terms or violate state laws, which could lead to disputes or an unenforceable contract.

Q: What if the buyer finds a title issue after closing?

A: If you didn’t disclose or resolve it, you could be liable for damages. A title search and legal review help prevent this.

Q: Can a buyer sue me after closing if I didn’t disclose a known issue?

A: Yes. Under the Michigan Seller Disclosure Act (MCL 565.951–565.966), failure to disclose known defects can result in lawsuits—even after the sale is complete.

Q: What if I use a generic purchase agreement template?

A: Generic forms may not comply with Michigan law or reflect your specific terms. An attorney can tailor the agreement to protect your interests and avoid ambiguity.

Q: Is a title search really necessary in FSBO sales?

A: Absolutely. A title search reveals liens, easements, or ownership issues that could derail the sale or lead to post-closing disputes.