Fri. Jun 9th, 2023
how-to-sell-a-house-by-owner-in-alabama

When the time comes to move, some tenacious homeowners are eager to take over the reins of their home sale and figure out how to sell a house by owner in Alabama.

With millions of homes sold each year, a modest portion of sellers — about 7% in 2021 and 10% in 2022 — choose to list “For Sale By Owner” (or FSBO — pronounced fizz-bow). Of those, 50% already knew the buyer of the home, according to data from the National Association of Realtors (NAR).

In this guide to selling a house by owner in Alabama, we’ll cover what can be the most difficult aspects of selling by owner in the Yellowhammer State, including the steps that might be harder than you think. We’ll also provide a comprehensive overview of the full process to prep, market, and close on your home without the assistance of a real estate agent.

Unsure About Selling FSBO in Alabama?

If you don’t have the time or expertise to list your home FSBO, partner with a trusted, top agent in your Alabama market. We analyze over 27 million transactions and thousands of reviews to find you the best agent for your unique situation.

Note: Once you’ve seen what’s required, you can roll up your sleeves and get started with your FSBO sale. Or — in the event you’d prefer to work with a real estate agent — HomeLight would be happy to introduce you to highly-rated professionals in your Alabama market who can help you command top dollar and provide a low-stress selling experience.

How does selling by owner (FSBO) work in Alabama?

Disclaimer: This blog post is intended for educational purposes only. HomeLight recommends that you look into the real estate regulations for your area and consult a trusted advisor.

FSBO is a method of selling your home without the involvement of a listing agent. In a FSBO scenario, the seller assumes the responsibilities that would normally fall to their agent, such as pricing the home, marketing it to potential buyers, arranging showings, and negotiating the deal.

In an agent-assisted sale, the seller typically pays a commission amounting to around 6% of the sale price, which is then most often split 50/50 with the buyer’s agent. That 6% is deducted from the seller’s proceeds at closing. By selling FSBO, a seller can eliminate the cost of the listing agent’s commission (so around 3%), though they may still need to offer a buyer’s agent commission.

Buyers’ agents will expect compensation for the work they do to bring a buyer to a sale, such as arranging showings and helping to tee up and qualify the buyer. Plus, when a seller isn’t working with an agent, the buyer’s agent may end up carrying more of the weight to get the deal to the finish line.

Next: Consult our guide on who pays closing costs when selling a house by owner for more details.

Finally, a FSBO sale does not mean that a seller won’t need any professional assistance. In Alabama, sellers are required to hire a real estate attorney, and FSBO sales typically warrant legal and professional oversight of some kind to avoid an abundance of legal risks.

Most people who sell by owner will need to hire an attorney to review and prepare key documents and make sure paperwork is filled out properly, such as the seller’s disclosures. We’ll address what disclosures are required when selling a house in Alabama later in this post.

Why sell a house by owner in Alabama?

The top three reasons people cite for selling FSBO include: did not want to pay a commission or fee (44%); selling to a relative, friend, or neighbor (29%); or that the buyers contacted the seller directly (16%), according to NAR data.

To get a firsthand perspective on selling homes in Alabama, we spoke with Jessica Donaldson, a top agent in Dothan, Alabama, who completes 66% more sales than typical agents in the area.

We also spoke with Clarence Graham in Birmingham, a top-producing agent who works with over 84% more single-family homes than the average Birmingham agent.

Donaldson says saving money is the number one reason why FSBO sellers she encounters in Alabama attempt to sell the home themselves. “They don’t want to have to pay the agent fee. They feel like that will cut into their bottom line,” she explains.

However, 2022 data from NAR shows that “FSBO homes sold at a median of $225,000, significantly lower than the median of agent-assisted homes at $345,000.” This NAR data contrasts the median prices among all FSBO homes (for which we have limited data) against all agent-assisted homes, regardless of distinctions like square footage. However, an earlier independent study that does adjust for square footage also showed a significant price difference: FSBO homes sold for an average of 5.5% less than agent-marketed sales.

Donaldson estimates that this disparity is even greater in Alabama, with FSBO homes selling for 10% to 15% below properties listed with an agent.

As you can see, FSBO is a mixed bag. So, before we share our selling tips, let’s lay out some pros and cons to help you decide if this is the route for you.

Pros of selling a house by owner

  • Ability to save on listing agent commission fees, usually around 3% of the sale price.
  • You’re entirely in charge and can manage the sale as you please.
  • No “go-between” in your communications with buyers.

Cons of selling a house by owner

  • FSBO listings tend to sell for less, statistically speaking.
  • Unless the seller already has a buyer lined up, FSBO listings can take longer to sell. According to recent data from the Alabama Association of Realtors (AAR), homes in the state spend an average of 67 days on the market. But Donaldson says FSBO homes in Alabama can take an additional two to four weeks to sell. “In the most extreme case, I watched a FSBO home sit for five years on the market,” she says.
  • Managing all communications and negotiations yourself is time-consuming. Not having a communication buffer can be a downside if the buyer pushes back or says negative things about your property.
  • You’ll be negotiating without help from an expert, which could mean leaving money on the table.
  • Setting the listing price is challenging — you may be tempted to go too high. You could also risk underselling at a low price.
  • Marketing your home is time-consuming. Without the marketing expertise of an agent, you won’t attract as many potential buyers to compete for your home and potentially increase the price.
  • You’ll still have selling costs, which may include transfer taxes and settlement fees. Not having agent representation could also lead to paying more in seller concessions.
  • Without the help of an agent to guide you through the disclosure process, you may put yourself at legal risk to be held liable for potential future problems with your home.
  • Most buyers are represented by an agent, so unless you know the buyer, you will likely pay a commission to the buyer’s agent, so you’ll only save half the commission while having more than twice the amount of work and aggravation.

In spite of the cons, we’ll help you navigate the challenges of FSBO if you’re committed to selling your Alabama house without agent assistance. For some, selling a home FSBO is a challenge worth accepting, and success can be measured in more ways than one.

Steps to sell a house by owner

Next, let’s review the FSBO process step by step.

1. Prepare your house for sale

Whether you’re selling with an agent or FSBO, at a minimum, you’ll want to get your Alabama home into respectable shape before any showings to increase your chances of receiving a fair price. Here are a few standard tasks to add to the list.

Indoors

These efforts will go a long way toward impressing buyers looking for a home in Alabama:

  • Declutter floors, shelves, and surfaces throughout the home.
  • Make small fixes and repairs, like a leaky faucet or broken door handle.
  • Lightly update with new light fixtures, faucets, or cabinet hardware.
  • Refinish hardwood floors.
  • Repaint bold walls (or those that look dingy) in a neutral color.
  • Reduce furniture in crowded rooms — consider a temporary storage unit.
  • Stage the home with final touches like fresh-cut flowers or a basket of fresh produce.
  • Use rugs to define spaces and place them strategically.
  • Deep clean until the house sparkles.
  • Open blinds or drapes to show off a great view and add natural lighting. Replace any dim, blown, or missing bulbs with bright bulbs.
  • Clear out an unused bedroom to create space for a potential buyer’s yoga or craft room.
  • Open windows to let in the warm Southern breeze and fragrant scent of flowers in your yard.
  • Hang up pictures of the beach for coastal properties.

“Definitely declutter or depersonalize the house as much as you can,” advises Graham. “You want to give the future buyer an opportunity to see themselves in the house. Sometimes when the home is too personalized, and it’s so cluttered, that could distract the buyer from truly looking at what they came for at the house that day,” he explains. As much as you treasure the photo of your son in his Crimson Tide football uniform, pack it away so you can display it in your next home.

Outdoors

Data from HomeLight’s 2022 Top Agents Insight Report shows that, on average, “Buyers will pay 7% more for a house with great curb appeal versus a home with a neglected exterior.”

Some important curb appeal upgrades can include:

  • Mow the lawn and pull weeds.
  • Apply fresh mulch liberally.
  • Upgrade your landscaping. Consider a new walkway, flowerbed, or shrubs.
  • Add a fresh coat of exterior paint. Don’t forget to repaint the front door if it shows wear and tear from the hot Alabama sun.
  • Install a new garage door if yours looks old or does not work properly.
  • Accentuate your home’s Southern hospitality by placing a swing or rocking chair on the front porch.
  • Adorn your welcoming front porch with hanging ferns or pots of mums.
  • Fill window boxes with colorful plants and flowers.
  • Replace shabby shutters or paint them with a color that contrasts with your home’s exterior.
  • Plant blooming hydrangeas in your front yard to add color and charm.

Graham recommends staging the front porch “to give a visual for the potential buyers of seeing themselves in that home relaxing.” A comfy porch swing or seating area will allow buyers to imagine themselves sipping lemonade after work or entertaining neighbors.

2. Do the homework necessary to set a competitive price

You’ve arrived at a critical moment in your FSBO process: setting a listing price. You don’t want to leave money on the table, yet you want to encourage activity on your listing.

Before listing a home, an agent usually conducts a comparative market analysis (CMA). This is a highly-detailed study of “comps” — similar homes nearby that have sold recently, are pending, are on the market, or were previously listed but taken off the market. Some may have even been pulled off the market without a sale.

“The right listing price is everything,” remarks Donaldson. She says that homes in southeastern Alabama sit on the market primarily because they are priced incorrectly. FSBO sellers frequently set the price too high. “Sellers are usually dug into the price that they believe in their mind the home should go for,” she explains. When the buyer’s agent advises their client to make a lower offer, the home may remain unsold when the offer doesn’t meet the seller’s unrealistic expectations.

Without an agent, you’ll miss out on the complexity of a full CMA and the know-how to interpret it.

However, with a little time and money, you can set a competitive price yourself.

Conduct your own “CMA Lite”

It’s time to roll up your sleeves and research.

Start with an online home value estimate

As a starting point, look at several online estimators for your home’s value. HomeLight’s Home Value Estimator aggregates publicly available data such as tax records and assessments, your home’s last sale price, and recent sales records for other properties in the same neighborhood.

We also add a new layer of information to our estimates using a short questionnaire. Tell us a few details about your Alabama home, such as:

  • How much work does it need?
  • What type of home is it (single-family, condo, townhouse, or other)?
  • Roughly when was your house built?
  • Are you planning to sell soon?

Using these insights, we’ll provide you with a preliminary estimate of home value in under two minutes.

Whether you use Zillow, Chase, Realtor, or Redfin to get a home value estimate, think of any online home price tool as a first step (not your only source of truth) — and recognize that the data used may be limited.

Narrowly filter your search for comps

When you’re ready to find comps, you can choose from sites like Zillow, Trulia, Redfin, or Realtor.

You’ll want to filter your searches to the area very near your house (within blocks if possible) and with similar characteristics. If you’re not finding any comps, expand your search map.

You’ll also want to filter results by details like:

  • Listing status (look at recently sold, pending, and active)
  • Number of bedrooms
  • Number of bathrooms
  • Square footage
  • Home type (single-family, condo, etc.)

Beyond the above criteria, the more houses you find with floor plans and age similar to yours, the better.

Use a site like Zillow to collect your data

As an example, let’s take a look at how to filter your search for comps on Zillow.

  • Navigate to Zillow.
  • Type in your address. If a pop-up with your home’s specs appears, close it.
  • Filter by “sold.” Yellow dots should appear on the map surrounding your house.

  • Now, filter by the number of bedrooms and bathrooms and check the box “Use exact match.”

  • Next, filter by home type.

  • Next, select the “More” box. Here you can specify square footage, lot size, year built, and — crucially — the “sold in last” (time period) category.

  • Scroll down and select to view houses that sold in the last 30 days.
  • If you find there are not many results in your area, try expanding to 90 days. However, the further back you go, the less relevant the comps.
  • If necessary, click the plus or minus buttons to widen the search area.
  • Once you’ve collected data for sold houses, revise or restart the search to view active and pending listings, as well.
Invest in an appraisal

If you want to further reduce guesswork, top agents recommend paying an appraiser to provide a professional opinion of value for your home. An appraiser will combine recent property data, research of the surrounding market, and information collected from a walkthrough of your home to determine an appraised value. For a single-family home or condo, the cost of an appraisal in Alabama will likely range from $222 to $351 — well worth it to avoid possibly overpricing or underpricing your house by thousands.

“It is crucial, absolutely crucial, that if a seller is going to go it alone, they need to get an appraisal,” recommends Donaldson. An agent will pull comparable properties in the area and guide sellers in setting the right listing price. But for FSBO sellers in Alabama, she says, “An appraiser would be their next best option. They can come in, an independent third party, and advise them on what the home would likely appraise for in the current market.”

Make sense of the research

Compare your home’s features against the nearby comps you collected. Hopefully, the houses you studied give an indication of an appropriate price range for your home. From there, you can make dollar adjustments based on characteristics that add value (patios, curb appeal, an extra bedroom) versus detracting from it (a busy street, deferred maintenance, less square footage).

Consider the differences and similarities of comps with the appraised value of your home to choose a price that will encourage activity (too high, and it may seem out of reach to many buyers), but will also maximize your profit.

Donaldson says features such as a screened-in or covered patio and a deck add value to your Alabama home. But the key to increasing your property’s worth may be whether you’ve replaced all the big ticket items that aren’t working properly or are on their last legs.

“If the home is within a few years of needing a new roof, go ahead and put that new roof on. That does add to the value. If it’s getting about time for a new HVAC system, go ahead, pull the trigger on that, and replace it,” she advises. You’ll spend some money upfront, but you’ll more than get that back when your house sells.

Although Alabama has a warm climate where a refreshing swim is a great way to cool off, don’t expect your backyard pool to fetch a higher price. “Pools actually do not really add much value at all. You don’t get what you put into it,” says Donaldson.

And a roof or HVAC system nearing the end of its life could even reduce your home’s value. Alabama’s humid, tropical weather especially takes its toll on an air conditioning system. “Make sure you’re getting your HVAC serviced annually to stay on top of issues,” Donaldson says, noting that this can help keep the unit running and prolong its lifespan.

3. Photograph your home

Listing photos are powerful, either pulling in buyers for showings or keeping them away.

To give your listing an edge, consider hiring an experienced real estate photographer. While they may charge as much as $170 to $200 an hour, Donaldson strongly recommends paying for high-quality listing photos since the vast majority of potential buyers look online at photos before they decide to walk through the home in person.

“It’s crucial that the photos stand out, and a professional photographer will do that,” says Donaldson. They take photos from the correct angles with proper lighting to make the all-important first impression that convinces buyers to schedule a showing. She adds that the “difference is night and day” between do-it-yourself and professional photos.

The cost of professional real estate photos varies by location. For example, a two-hour photoshoot averages about $367 in Birmingham and $406 in Mobile.

But if you do go the DIY route, make sure to:

  • Use a good camera with a wide-angle lens.
  • Pay attention to lighting.
  • Include a photo of every room.
  • Take multiple pictures of living areas, kitchens, and bathrooms.
  • Try shooting different angles.

Review our post on how to take quality real estate photos for further guidance.

4. Create a detailed, compelling listing

Along with stellar photos, you’ll want to craft an informative and compelling listing. Leverage both the listing description (a paragraph or two highlighting key features) and the property details to show potential buyers all about your home and what makes it desirable.

Tell a story with your description

Draw in potential buyers with a powerful listing description that tells a story about your Alabama house, including details like:

  • Your home’s most unique and desirable features, like a large front porch brimming with Southern charm or an open floor plan with an abundance of natural light
  • Recent upgrades like a kitchen or bathroom remodel or a new roof, or HVAC system
  • High-end appliances, materials, or finishes
  • Outdoor features like a pool or patio
  • Neighborhood features and amenities
  • Nearby parks, walking trails, restaurants, stores, medical facilities, and attractions

“Anything that they love about their home they should highlight in their description,” Donaldson advises. The objective is to emphasize your home’s outstanding features so the buyer will realize that your property would be perfect for their needs.

Donaldson also cautions against verbiage that could potentially be fair housing violations such as, “This would be a great family home.”

Lastly, and this is critical: specify in your description the commission a buyer’s agent will receive from the proceeds. Most agents don’t want to show their clients properties from which they’d receive a paltry commission. When you list in the MLS, you must include a buyer’s agent commission. It can be as little as $1 but recognize that may limit your buyer pool as buyers’ agents typically expect to be compensated for their efforts. If you choose not to list in the MLS so you can forgo the buyer’s agent commission, you’ll seriously limit the exposure your home will get.

Don’t skimp on the property details

Aside from writing the description, you may be prompted to enter information like:

  • Age of the home
  • Square footage
  • Architectural style (i.e., split-level, rancher, craftsman)
  • Appliances included
  • Exterior building materials
  • Flooring types
  • HOA fees
  • School zone information, including school district ratings and reviews
  • Lot size

Many real estate agents and potential buyers really do read this “fine print” on your listing — so include accurate details, and plenty of them.

“If they have a fantastic living area with a huge fireplace, and it’s open and bright and has a lot of natural light coming in, I recommend that they highlight that,” remarks Donaldson.

Accentuate your home’s best and most unique features to increase your chances of a FSBO sale. Graham says to be sure to point out if your house has two bedrooms and two full bathrooms on the main level. Alabama buyers are looking for this type of floor plan, especially if a family member can’t walk up the stairs or they live with an elderly parent.

5. List your home online

It’s finally time to post your Alabama home online. While you can create FSBO listings for free on popular search sites, you’d have to painstakingly post site by site, and your listing wouldn’t reach the majority of buyers and agents.

To give your home the most exposure, pay to have your home put on your local MLS (multiple listing service) — a platform agents use to share properties with one another as well as major real estate sites. Posting there will feed your listing to buyers’ agent databases and to common sites buyers use.

Only licensed real estate agents and brokers who are MLS members can post to the MLS. However, you have two options to gain access: paying an agent to post for you or using a FSBO platform online.

Pay an agent to list your home on the MLS

A local agent may be willing to list your house on the MLS for a flat fee, without any other involvement in your real estate transaction. If you decide to go this route, ask whether the fee includes updating your listing if necessary.

Use a FSBO platform with an MLS option

You can use various paid websites to list your Alabama house online as “for sale by owner.” These sites offer packages ranging from about $100 to $400 for just a listing, or a larger flat fee of $3,000 to $5,000 that includes any number of additional professional marketing services.

Some of these companies display their rates on their websites, but others won’t quote a fee until you input your address or select an area of the country. A few examples include:

It’s important to note that most of these companies serve FSBO sellers nationwide, which can cause challenges if the assisting representatives don’t understand the local market trends in your Alabama neighborhood.

Whatever you choose, read the fine print carefully: some sites may have hidden fees or even take a percentage off your sale — a detour you’d rather avoid on the FSBO route.

Not willing to pay for the MLS?

If you’re determined to save money by forgoing the MLS, creating a free FSBO listing on Zillow might be your top option. You can post a video and unlimited photos, and get fairly wide exposure via Zillow and the Zillow-owned Trulia.

6. Market your home

Now it’s time to spread the word about your Alabama home.

Experienced agents like Donaldson and Graham know that posting a home on the MLS is just the beginning of the marketing phase. A successful home sale requires a deliberate and targeted marketing plan to reach the right buyers and attract the best offers.

“It’s beneficial in so many ways to get out there and advertise the home beyond just sticking it on the MLS,” says Donaldson, who advocates a proactive marketing approach.

“The more demand you have, most of the time you can drive up price when there are more people wanting the home,” adds Graham about the importance of marketing. He advises FSBO sellers to be creative in their marketing endeavors rather than just stick a sign in the yard and pray that someone stops by.

Here are some of the steps you can take to market your home:

Place a nice FSBO sign by the road

Consider getting a custom yard sign rather than purchasing a generic one you write on with a Sharpie. You can order a custom sign on a site like Vistaprint with your contact information, plus a stand, for as little as $25 plus shipping. Although some MLS providers have rules about whether you can post FSBO yard signs while your home is on the MLS, they are generally allowed in Alabama.

Share on social media

Share your home across social media — and ask your friends to share, too. “Get the listing out in front of as many faces as possible,” Donaldson stresses the power of social media marketing. She recommends paid advertisements as well as boosted and sponsored posts on Facebook and Instagram to reach a larger audience of prospective buyers.

Hold an open house

Graham suggests creating buzz for your open house by beginning your marketing efforts on Thursday or Friday through different social media platforms. But don’t overlook the personal approach. “Knock on at least a hundred doors around the neighborhood with a flyer inviting people,” he recommends.

Try these strategies for a successful open house event:

  • Share details on Facebook and Nextdoor.
  • Update your MLS listing with the open house details (if you’re able to as part of paying the flat fee), or update your DIY FSBO listing.
  • Place open-house signs at nearby intersections.
  • Tidy up the house before potential buyers come through.
  • Pass out info sheets with the address, bullet points about the house, your contact info, and perhaps one photo.
  • If you can, collect visitors’ info — then follow up later to ask if they have any questions.

Find more expert tips for how to hold an open house at this link.

7. Manage showings

If your marketing is successful, your next step will be to show the home to prospective buyers. Welcome to the busiest phase of the home sale process. According to Donaldson, a major reason some FSBO sellers switch to an agent is that they underestimated the time, energy, and expertise needed to manage this crucial step. “That’s another area where I think FSBO sellers are not thinking it through before they decide to put their home on the market,” she points out.

“Hiring a listing agent can make it so much easier in that regard,” says Donaldson. Real estate agents coordinate showings so sellers aren’t taking calls all day and night from potential buyers. With a lockbox, they can show the home at any time, even when the owner is away.

FSBO sellers are at a major disadvantage when it comes to showing the home. “Most of the time, the sellers are either giving out their code to the front door to strangers. Or if they don’t have a code, they are having to take time out of their day to leave work and go home and show the home or limit the hours and times the home can be shown because they have to be there,” notes Donaldson.

While photos might initially attract buyers to a property, Donaldson says, “Nothing beats actually walking through the home in person.” Showing the home may be the most critical phase for a successful home sale and creating the first impression that can either make or break a deal.

“You can’t fully gauge the true condition and even the scale of the home without coming and walking through it,” she says. But it’s also important to view the area surrounding the home, which could either clinch the sale if nearby properties are well-kept or send buyers running the other way if the neighbor’s yard is neglected or a dilapidated camper is parked in the driveway.

To manage the logistics of showings:

  • Respond to inquiries ASAP.
  • Set end times if you need to fit many showings in one day. This will also create a sense of demand and urgency for buyers to place offers.
  • Remove or secure valuables.
  • Make sure the home is clean and tidy for showings.
  • Set your air conditioning to a comfortable temperature. Potential buyers who walk into a hot house on a 90-degree Alabama day won’t stay long enough to see all the amazing features your home offers.
  • Flip on the lights and open the blinds to present the home in its best light.
  • Follow up with buyers’ agents after showings to get their feedback.

Should you be present for showings?

If you’d rather not be present for every showing, consider using a lockbox with a code to let buyers’ agents enter the house. This is standard industry practice among agents. To ensure you’re working with someone legitimate, use Google or sites like arello.com to check their real estate license number.

With unrepresented buyers, plan to be on the property for the showing. During a showing, we recommend you:

  • Point out a few highlights of the house.
  • Let buyers look without hovering.
  • Be prepared to answer questions.
  • Avoid the temptation to tell all — let the house and listing do the talking.

Donaldson says it’s uncomfortable for buyers and their agents when the owner is present during showings.

“I don’t feel like I can really speak freely with my buyers or point out potential red flags that I may be looking for,” she explains. “Make yourself scarce,” she recommends. Wait outside or in your car, but let buyers know you’re available to answer their questions while giving them space to walk through the home and make observations without looking over their shoulders.

8. Evaluate offers, negotiate a deal, and make disclosures

You’ve got your first offer — congratulations! Before signing anything, Donaldson says, “It is so important that they not only review the offer themselves backward and forwards, page by page — go over it multiple times.”

If you’re not hiring a listing agent to make sure you understand all the terms, conditions, and fine print in the purchase contract, she suggests consulting a real estate attorney for peace of mind and to ensure there aren’t any items to be concerned about.

“The first due diligence you want to do is make sure they have proof of funds,” Graham recommends. A bank statement will help weed out people who are just looking around and don’t have the qualifications to purchase your house from legitimate buyers who can obtain financing.

Graham says the next step is to ask for a pre-approval letter from a reputable mortgage company that you’re comfortable with. You don’t want to find out two days before closing that the loan didn’t come through and the deal falls apart after you’ve already moved out of your house. He suggests calling the lender to find out if they’ve verified the buyer’s funds and employment.

When performing your due diligence, find out whether your buyer is getting a conventional loan or a VA, FHA, or USDA loan with higher standards for the home’s condition.

“If they have any kind of issues that could be flagged and that they would ultimately need to repair before the home is appraised, they need to keep that in mind,” cautions Donaldson. Otherwise, you could find hefty repair costs eating into your profit, or the sale could go up in smoke if the loan falls through due to appraisal issues.

Here are key considerations when evaluating an offer on your Alabama home:

  • Vet potential buyers by requiring a mortgage pre-approval letter or proof of funds.
  • Require everything in writing.
  • Remember, you can counter-offer and negotiate.
  • Look for a good real estate attorney. (See the next step!)
  • If there’s a home sale contingency, contact the agent selling the home to see where they are in the process.
  • Negotiate terms and conditions in the contract to protect yourself, like deadlines for contingency removals and sufficient earnest money should the buyer walk away.

Property condition disclosure

In Alabama, a residential property seller is generally not required to disclose the condition of the home to the buyer except if defects might cause an immediate risk to the buyer’s health or safety. Alabama is a “caveat emptor” or “buyer beware” state, so the responsibility falls on the buyer to determine if the home has any issues. However, the seller must answer truthfully and disclose known defects if the buyer asks about the property’s condition or if there is a fiduciary relationship between the buyer and seller.

In these situations, you could be liable for damages incurred due to nondisclosure or misrepresentation of flaws that you are aware of.

Whether required by law or not, some sellers may prefer to provide the disclosures before an offer has even been presented so that a prospective buyer is more informed beforehand and less likely to withdraw from a deal later on.

In an agent-assisted sale, your listing agent would likely provide you with the disclosure form prepared by the Alabama Association of Realtors (AAR). However, as a FSBO seller, you can find the Alabama Seller’s Property Disclosure Statement online. Completion of this form is optional, but you’re required by federal law to disclose information about the dangers of lead-based paint if your home was constructed prior to 1978.

What will you be asked? In Alabama, you can expect to disclose any significant defects or problems you’re aware of concerning:

  • Environmental issues (urea formaldehyde, asbestos, lead-based paint, radon, toxic mold, underground storage tanks, old septic tanks, field lines, abandoned wells)
  • House systems (plumbing, electrical, appliances, floors, and walls, doors and windows, ceiling and attic fans, security, sump pump, chimneys, fireplaces, pool, hot tub, sauna, sprinkler, HVAC)
  • Structural integrity (foundation, slab, structure, exterior veneer, basement, exterior finish, and insulation system siding)
  • Termites, wood-destroying organisms, fungi (signs of pests, damage, treatment, warranties)
  • Roof (age, leaks)
  • Land/drainage (soil stability, drainage, flooding, grading, located in flood plain zone, retention/detention basin, pond, lake, creek, spring, watershed)
  • Boundaries (survey, improvements, encroachments, unrecorded easements, burial plots)
  • Water (source, pressure)
  • Sewer system (public or private, septic tank, pump/lift)
  • Construction/remodeling (additions, structural modifications, alterations, building code violations)
  • Homeowners/condo association (presence, annual fees, conditions causing potential tax increase or assessment, shared features including walls, fences, or driveways)
  • Miscellaneous (existing or threatened legal action, special assessments, other defects)

If in doubt about a problem with the home’s condition, most top real estate agents would recommend you disclose it. If you know of an issue and choose not to disclose a major problem, and that defect is later discovered, you could be held liable for damage or subsequent costs.

9. Close the sale — with professional help

Time to button up that deal.

Alabama is one of several states that require a real estate lawyer to help close the sale. FSBO sellers need to hire a licensed attorney to draft and prepare all legal documents to comply with Ala. Code § 34-3-6(c).

However, required or not, it’s generally a good idea to invest in the services of an experienced attorney as you close one of the biggest and most complex deals of your life. By doing so, you’ll minimize your legal and financial risk, plus simplify the process for yourself. A seasoned real estate lawyer also has a network of title companies, home inspectors, and other professionals for various services required through the FSBO process.

The purchase contract is a legal document, so Graham says it’s highly important to hire an attorney before you sign it. As a FSBO seller, this is especially critical since you don’t have a real estate agent to explain terms or look out for your interests

“You just want to make sure that you haven’t entered into a contract that you’re not familiar with,” says Graham. He adds that you need assurance that the buyer didn’t include terms that are unfavorable for the seller. An attorney will also ensure that all the documents are in place, so the closing can proceed smoothly.

Real estate attorney fees can vary depending on location and how much help you want or need. In Alabama, they typically average $271 per hour — well worth it for professional guidance in closing one of life’s largest legal transactions.

Real estate agents may refer their clients to top attorneys they’ve worked with in the past. But if you are selling a house by owner, ask your family and friends for referrals or search online for a real estate lawyer in Alabama on Lawyers.com and FindLaw.com.

FSBO mistakes to avoid in Alabama

On your FSBO journey, watch out for these major pitfalls:

  • Missing out on the MLS.
  • Forgetting or refusing to pay the buyer’s agent commission.
  • Overpricing or underpricing.
  • Letting your house sit on the market too long.
  • Refusing to pay for closing costs or repairs that sellers commonly pay for in Alabama or agreeing to seller concessions that are not typical.

One of the most common errors made by FSBO sellers when selling a home in Alabama is not ordering the proper required documents prior to closing, such as the payoff letter or termite bond. “Things like that can delay a deal or even kill it if the buyer’s interest rate is about to expire, and now they have to get a new rate,” explains Graham.

Graham says FSBO sellers may make other mistakes when it comes to paying for closing costs or making repairs that buyers request because they don’t know what’s customary in Alabama.

“My best advice is just to know what you’re getting into,” Donaldson says. Before entering into negotiations, make sure you understand the terms and conditions of the offer as well as any concessions the buyer wants and what they will cost. Does the timeline meet your needs, or should you request a different date for the buyer to take occupancy?

“And if by reading the documents you don’t fully understand, hire a professional, whether that’s an agent to take the burden off of you or just a real estate attorney to review the legal documents. Definitely know what you’re saying yes or no to,” Donaldson cautions FSBO sellers in Alabama.

Request a Cash Offer for Your Alabama Home and Skip the Prep Work

Skip the repairs and the agent commissions by requesting a cash offer for your home. With HomeLight’s Simple Sale, you can receive a no-obligation all-cash offer in as little as one week, and close the sale in as few as 10 days.

Alternatives to selling by owner in Alabama

If you decide you don’t want the hassle or pressure of FSBO, you’ve got other solid options.

Enlist the help of a top-rated real estate agent

Ultimately, the services and price gains you can get with an experienced real estate agent may put more money in your pocket than FSBO. A proven agent is also better equipped to help you achieve your selling and moving timelines.

Donaldson shares an experience with a client she helped purchase an expensive new construction home, so they decided to sell their Midland City house by owner to cut costs. They set their listing price too low and quickly went under contract.

“I don’t believe that they paid attention to the offer when they signed it,” Donaldson notes. Some of the terms they agreed to caught them by surprise, such as concessions they really didn’t want to pay for. They also assumed the buyer would let them stay in the home for a couple of extra months while their new home was being built, but this was not the case.

The client later told Donaldson that they wished they had hired her as their listing agent, which would have made things a million times easier and put more cash in their pocket. “That was something that they, unfortunately, learned the hard way,” she remarks.

Graham tells a similar story about a FSBO seller-turned-client. After a few months of trying unsuccessfully to sell their home in Birmingham’s Highland Lakes community while living out of town, they listed it with Graham.

“We were able to get that house under contract within a week,” says Graham. By giving the seller advice on staging, taking high-quality photos of the property, increasing traffic with an open house, and marketing to prospective buyers living in smaller homes about a mile away, he helped the seller get a higher price and net more money, even after paying the agent commission.

Interested in such expertise? HomeLight can connect you to top-performing agents in your Alabama market. Our free tool analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. It takes only two minutes to receive your matches.

Request a cash offer to buy your Alabama home

If you’d like to skip the sale prep altogether — plus avoid paying agent commissions — you can opt to sell your home “as-is” to an all-cash buyer instead.

For a low-stress experience, consider requesting a cash offer from HomeLight’s Simple Sale platform. Tell us a few details about your home, and in as few as 48 hours, we’ll send a no-obligation all-cash offer your way. If you decide to accept the offer, Simple Sale sellers have the ability to close in as little as 10 days.

Without leaving the Simple Sale platform, you’ll also be able to compare your cash offer to an estimation of what your home would sell for on the open market so you can make an informed decision.

Ready to sell your Alabama home?

Unless you already have a buyer lined up, selling a house by owner in Alabama requires a significant investment of time and effort. You’ll need to pull your own comps, capture excellent pictures, create a listing, market the house online, field inquiries, host showings, negotiate, and close the deal. And that’s after preparing the house itself.

You also have to consider that FSBO listings tend to sell for less than agent-assisted sales. An experienced agent who knows the area can make recommendations for targeted upgrades to help you maximize your sale price and get a premium offer. This can help to offset or, in some cases, more than make up for the cost of commission — while saving you time and headaches.

“It doesn’t cost anything to really talk with an agent first to compare all options,” Graham advises FSBO sellers in Alabama. Do your own research about the price an agent can help you obtain and weigh all the pros and cons so you can make an educated decision about the best way to meet your home selling needs.

If you choose to go FSBO, you should have a good idea now of what to expect from the process. Otherwise, our internal transaction data at HomeLight shows that the top 5% of real estate agents sell homes for as much as 10% more than average, and we’d be happy to introduce you to some of the best agents in your Alabama market.

Writer Hayley Abernathy contributed to this story.

Header Image Source: (Nathan Anderson / Unsplash)

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