Selling your house to a private buyer can save you the agent’s commission, but every task an agent usually handles now sits with you: setting a defensible price, drafting an enforceable contract, delivering required disclosures, clearing title, running the closing, and reporting the sale to the IRS. Miss one and you risk a delayed closing, lost money, or liability that surfaces years later. Here is what each step actually requires.
Agree on a Price You Can Defend
Without an agent running a comparative market analysis, the most reliable way to anchor the price is a licensed appraisal. Expect to pay $300 to $500 for a single-family home. The appraiser gives both sides a defensible figure based on recent comparable sales, the home’s condition, and local trends. If your buyer is financing, their lender will order its own appraisal anyway, so getting one early heads off surprises weeks into the deal.
You can supplement that with public records or online listing data on homes that actually sold, not asking prices, adjusting for square footage, lot size, and condition. The price in a private sale is entirely negotiable; grounding it in real data keeps you from underpricing and reassures the buyer.
Put the Deal in Writing
Every state requires contracts for the sale of real property to be in writing and signed by both parties. This rule, the statute of frauds, means a handshake deal for a house is unenforceable in court. The purchase agreement is the backbone of the whole transaction.
Pull the legal description of the property from your current deed. That is the lot-and-block number or metes-and-bounds description that uniquely identifies the parcel; a street address alone is not enough because addresses can be ambiguous or change. The agreement also needs the full legal names of both parties, the agreed price, and the closing date.
Contingencies Protect Both Sides
Contingencies are the escape hatches that let one party walk away without penalty if a specific condition fails. Three show up in nearly every residential sale:
- An inspection contingency gives the buyer a window, usually 5 to 10 business days, to hire a home inspector and negotiate repairs or credits.
- A financing contingency protects the buyer if the mortgage falls through, typically running 30 to 60 days, and should specify loan type, amount, and the maximum interest rate the buyer will accept.
- An appraisal contingency lets the buyer renegotiate or exit if the lender’s appraisal comes in below the purchase price, usually resolved within 10 to 14 days.
Private sellers sometimes skip contingencies to keep things simple. That is a mistake. A financing contingency protects you too: if the buyer cannot close and the contract has no contingency language, unwinding gets messy. Spell out each deadline and what happens to the earnest money if a contingency is triggered.
Earnest Money and Personal Property
Earnest money is the deposit the buyer puts down after signing to show commitment, typically 1% to 5% of the sale price in residential deals. The contract should name who holds it, often an escrow company or attorney, and set out the conditions under which each party can claim it. If the buyer backs out without a valid contingency, you keep the deposit. If a contingency fires, they get it back.
If the sale includes appliances, furniture, or anything else not permanently attached to the home, draft a separate bill of sale listing each item. Folding personal property into the real estate contract creates confusion about what the deed actually conveys and can cause title issues at recording.
Disclose What You Know
Federal law requires anyone selling a home built before 1978 to disclose known lead-based paint hazards. Under 42 U.S.C. ยง 4852d, you must give the buyer an EPA-approved lead hazard information pamphlet, disclose any known lead paint, and provide a 10-day window for the buyer to conduct their own lead inspection before the contract becomes binding.1Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property Skipping this step exposes you to civil penalties that can reach tens of thousands of dollars per violation, and the buyer can also pursue treble damages, meaning three times their actual losses.2Office of the Law Revision Counsel. 15 USC 2615 – Penalties The requirement applies whether or not you use an agent.
Beyond lead paint, every state has its own property condition disclosure requirements. Most use a standardized form covering known material defects: age and condition of the roof, whether the HVAC system works, any history of water intrusion or flooding, easements, shared driveways. The form is usually posted on the state real estate commission or regulatory agency’s website.
Intentional concealment is where sellers get into real trouble. Actively hiding a known problem, like painting over water damage or covering a cracked foundation, exposes you to civil liability for the buyer’s repair costs and potentially punitive damages. Some states treat deliberate concealment as criminal fraud. The specifics vary by jurisdiction, but the principle does not: disclose what you know. Filling out the form honestly before the contract is signed is the single best protection against later litigation.
Clear the Title Before Closing
Before you can hand over clean title, you need to know exactly what is attached to it. Start by requesting a payoff statement from your mortgage lender. The payoff shows your remaining principal, accrued interest through the expected closing date, and any prepayment penalties. That figure tells you how much of the sale proceeds you actually keep.
Next, hire a title company to run a title search. The search examines public records for liens, judgments, and encumbrances: unpaid property taxes, mechanic’s liens from contractors, old utility assessments. Every lien must be cleared before or at closing, either paid directly or negotiated with the lienholder. If the property sits in a homeowners association, you will also need an HOA estoppel letter showing your current balance, any outstanding fees, and whether you are in compliance with association rules. The HOA or its management company issues the letter, often for a fee.
Why Title Insurance Still Matters
Title insurance is one of the most overlooked steps in a private sale, and arguably more important here than in an agent-assisted deal because there is no brokerage catching errors. An owner’s policy protects the buyer against defects the search missed: hidden liens, recording errors, forged documents, unknown heirs with a claim. If the buyer is financing, the lender will require its own policy regardless. The seller typically pays for the owner’s policy, though that is negotiable. A title company can handle the search, the insurance, and the closing itself.
Handle the Closing Through a Settlement Agent
Even in a private deal, you want a neutral third party running the closing. An escrow or settlement agent holds the buyer’s funds and the signed deed until every contractual condition is met, then disburses the money and records the deed. A title company or attorney charges for this, but the fee is far less than the cost of a botched handoff of six-figure sums. A handful of states, including Connecticut, Delaware, Georgia, Massachusetts, New York, South Carolina, and West Virginia, require an attorney to handle the closing.
The deed is the legal document that transfers ownership. You sign it, a notary acknowledges it, and it gets recorded with the county recorder’s office or registrar of titles. Most states cap notary fees between $5 and $15 per signature, though remote online notarization can run higher. Recording fees vary by county, typically $10 to $90 for a standard deed. Many jurisdictions also charge a transfer tax tied to the sale price. Rates range widely: some states charge nothing, others charge 2% or more, and some cities add a local tax on top. Your settlement agent can give you the exact figure.
Property tax prorations are calculated from the current assessment and the closing date. If you prepaid taxes through year-end but close in June, the buyer owes you for the remaining months. If taxes have not yet been paid, you owe the buyer for the months you occupied the home. The settlement statement breaks this down to the day. Once the deed is recorded and funds are wired or delivered by cashier’s check, the public record reflects the new owner.
Report the Sale to the IRS
Selling your home triggers potential capital gains tax, and handling the sale yourself does not change what you owe. Most homeowners selling a primary residence qualify for a sizable exclusion. Under Section 121 of the Internal Revenue Code, you can exclude up to $250,000 of gain if you are single, or up to $500,000 if married filing jointly.3Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence To qualify, you must have owned and used the home as your principal residence for at least two of the five years before the sale.4Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence Gain is the difference between your sale price and your adjusted basis, generally what you paid for the home plus qualifying improvements such as a new roof or kitchen renovation.
Who Files the 1099-S
Someone still has to file Form 1099-S with the IRS to report the transaction. When a settlement agent or title company closes the deal, they file it. If there is no settlement agent, responsibility falls in a specific order: the mortgage lender, then the seller’s broker, then the buyer’s broker, then the buyer themselves.5Internal Revenue Service. Instructions for Form 1099-S Proceeds From Real Estate Transactions In a true private sale with no intermediaries, the buyer may end up with the filing obligation, so both parties should either address it in the purchase agreement or hire a settlement agent to handle it.
If you qualify for the full Section 121 exclusion and the sale price is $250,000 or less, or $500,000 or less for married couples who both certify, you can provide a written certification to the person responsible for filing, and no 1099-S has to be issued. If a 1099-S is issued, you must report the sale on your return even if every dollar of gain is excluded.6Internal Revenue Service. Important Tax Reminders for People Selling a Home
One Boundary: Foreign Sellers and FIRPTA
If you are a U.S. citizen or resident, FIRPTA does not apply to you. If the seller is a foreign person, however, the Foreign Investment in Real Property Tax Act requires the buyer to withhold 15% of the sale price and remit it to the IRS using Form 8288 within 20 days of closing. A seller who is not foreign avoids this by giving the buyer a signed certification of nonforeign status, which includes the seller’s name, address, and taxpayer identification number; a valid W-9 works as well, and the buyer keeps it for five years.7Internal Revenue Service. Instructions for Form 8288 Reduced withholding or an exemption may apply when the buyer intends to use the property as a personal residence and the price is $300,000 or less.8Internal Revenue Service. FIRPTA Withholding In a private sale with no agent or attorney prompting the question, this is easy to miss, and the IRS holds the buyer liable for the withholding if it is not collected.