When you are selling your home, you can hire a real estate agent or sell it yourself (also known as "For Sale by Owner"). The main advantage of selling your own home is the potential to save on commission fees in return for doing the work of a real estate agent yourself.
How much money can you save with FSBO?
You might save 50% of the commission fees when you sell your home yourself. The reason you only save half is because both the seller and the buyer are usually represented by real estate agents, and the seller typically pays the buyer’s agent commissions.
For example, say you are selling your home for $400,000. Typically real estate agent commissions run between 5% and 6% of the sale price of the home or between $20,000 and $24,000. Because you’ll be expected to pay the buyer’s real estate agent commissions, you might save between $10,000 and $12,000.
What are advantages of selling a home FSBO?
- You call the shots. Without a realtor, you get to decide when people can see your place, who you want to sell to, how much to charge and if you want to adjust the price. You don’t have to consult with anyone. You also can negotiate directly with a potential buyer and remove the middleman.
- No waiting. Real estate agents are busy and have multiple clients, so they may not get back to you as quickly as you may want. When you sell your own house, you can give it all the time and energy necessary to ensure a successful sale.
- No pressure. Sometimes realtors can pressure sellers to take an offer or lower the price to make a sale. While the decision is up to you, you won’t have to stress about having to compromise or disagree with an agent’s point of view.
What are disadvantages of selling a home FSBO?
- Lots of work. You have to list your home, market it, field calls, manage showings, qualify buyers, and review and negotiate offers. You’ll also need to manage the closing of the sale, which can include questions about the home inspection, title search, appraised value of the home, and more.
- Choosing the right price. Real estate agents typically have more access to home price information and more insights into local sales trends than homeowners. This means they can help you avoid setting a sale price for your home that is too high or too low.
- Less visibility. When you are not a real estate agent, it can be harder to get your home listed on the platforms and websites where agents and buyers search homes for sale. Sites designed for FSBO homes do not always get as much traffic as other sites.
- More surprises. An experienced real estate agent knows the ins and outs of selling a home, including common problems that can arise and how to fix them.
- Buyers may be reluctant. Some homebuyers and buyers agents can be reluctant to work with owners selling their own houses. They may see FSBO sales as more complicated and time-consuming because they will be working with a person who does not have experience selling homes.
Home sellers can choose FSBO transactions when they already have a buyer for their house who can afford the sale price. These buyers might be family members or neighbors, for example. When you are selling your home, think about the pros and cons of choosing For Sale By Owner and select the one that’s right for you.
Last reviewed and updated December 2022 by Freedom Mortgage Corporation.