I have not looked at this recently, but here are some old
notes I had.

cd to /usr/share/sendmail/cf
cp netbsd-proto.mc sendmail.mc
add line to sendmail.mc:
FEATURE(`accept_unresolvable_domains')dnl
and add file /etc/mail/service.switch with
hosts     files
add to /etc/hosts
ip_address localname.
localhost.
for encryption support with self signed certificate add to mc file:
# Enable encryption (TLS) support
define(`confSERVER_CERT', `/etc/mail/certs/cert.pem')
define(`confSERVER_KEY', `/etc/mail/certs/key.pem')
define(`confCACERT', `/etc/mail/certs/cert.pem')
define(`confCACERT_PATH', `/etc/mail/certs/')

regenerate sendmail.cf with:
m4 sendmail.mc > /etc/mail/sendmail.cf