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For Sale by Owner Homes: Worth the Hassle?

For Sale by Owner Homes: Worth the Hassle?

For sale by owner homes often get a bad wrap. After all, FSBO sellers are known to be overly cheap.

But do they get a bad wrap, or is this method really worth the time and effort? Read on to learn what we think.

Whether you are buying, selling, or just looking for more information on the real estate market, homes For Sale By Owner are frequently discussed but seldom explained.

We strive to fill this void by explaining FSBOs, why they are used, the best websites to list them, and everything else you need to know.

So read on for more information!

What Is For Sale by Owner?

Depressed real estate agent sitting on grass in front of house for sale, outside as an image for a piece on For Sale by Owner Homes


For Sale By Owner (FSBO), for short, means selling a home without a real estate agent.

While this saves you a commission, it creates more work and opens the door for liability as a result of a mistake.

If you choose to do the work yourself, you will list, show, and close the sale without a professional.

Why Choose For Sale by Owner

Real estate agent showing a family a house, closer in

Monkey Business Images/Shutterstock

The most common reason to exclude a realtor is to pocket a higher percentage of the sales proceeds.

While commissions vary by location and company, the average broker charges between 5% and 7% of the total home sale price.

On a $400,000 home, a 5% commission equals $20,000. FSBO home sales incur no commission because you do the work yourself.

While these cost savings are significant, only 7% of all homeowners chose to list their home without a realtor.

Interestingly enough, in 2018, the average agent-assisted home sold for $265,000 versus the average For Sale By Owner home price of $200,000.

These are averages, so the numbers are skewed to the high side (a multi-million-dollar homeowner likely has agent representation), but it does highlight a difference in prices, which we will discuss later on.

Commissions on For Sale by Owner Homes

Home and money bag put on the scales with balance put on the wood in the public park, Saving for buy a new house or real estate and loan for plan business investment in the future concept.

Watchara Ritjan/Shutterstock

For Sale By Owner Listings are attractive because the sale isn’t facilitated by a realtor, which means you don’t pay a commission. However, some FSBOs still incur a commission.

The sales commission is paid in full by the seller and split between the buyer and seller’s brokers. Because the seller isn’t paying a commission, a home buyer has to pay their agent out of pocket.

Of course, it’s not fair for an agent to provide representation without compensation. As a result, the buyer usually writes a lower offer to offset the cost of the commission they are covering (remember that sellers pay the commission on a sale).

Tip: Create an incentive for agents to show your house by saying you’ll pay a partial commission of 2 or 3%. Though you’re not out of the woods, you’ll still save money compared to hiring an agent.

Pricing a FSBO Home

A common challenge presented to owners selling a house without a realtor is calculating a price.

Brokers and Realtors have access to the Multiple Listing Service (MLS), which provides highly valuable information about every aspect of a listing.

Because access to this database is only given to brokers, FSBO sellers must rely on publicly available information.

1. Use Online Resources

Real Estate Market Blue Price Tags Above Properties. House Prices. 3D Abstract Illustration.

Virrage Images/Shutterstock

FSBO homeowners can use free online services like Zillow to easily gather much of the same information housed in the MLS.

Listings include the number of bedrooms and bathrooms, square footage, pictures, and, most importantly, the sale price.

Filtering these listings by “recent sales” gives historical sales prices and helps determine comparable values for both old and new homes.

While Zillow does not include more detailed information like easements and title issues, it’s still the best tool to help an owner determine how to price a home.

Plus, it’s public information, which means anyone can access it. The biggest mistake you can make when listing a home For Sale By Owner is overpricing the house.

Realtors usually price homes accurately by using logic and dates. FSBO homes are commonly overpriced because owners are emotional with the sale and think their home is worth more than its market value.

Tip: Having reasonable expectations is critical at this step in the process. If your neighbor’s home is similar to yours and just sold for $175,000, chances are you won’t get $225,000 for your home. Failing to be realistic with expectations may cause buyers to skip your listing in favor of those that are fairly priced.

2. Hire an Appraiser

For a piece on how to price FSBO homes, Close-up Of A Man's Hand Filling Real Estate Appraisal Form At Home


In addition to using market value, you can also use an appraisal service. Similar to “comps” used by realtors, an appraisal is a report used by lenders to establish a conservative home value.

A home similar to the FSBO property is adjusted according to its features (and, in some cases, differences). Appraisers undergo extensive training and are state-certified.

In most markets, an appraisal costs between $300 and $400, depending on the work required. While this report helps support the value you’ve established above, please note that these reports are mainly used by lenders.

This means the end value is likely lower (i.e., more conservative) than that of your market analysis. These values are commonly averaged together to arrive at a conservative value for the home.

Marketing a Home For Sale by Owner

The most laborious parts of selling a home without a realtor is the marketing and sales process.

While it may seem like realtors are paid excessive commissions, most people selling For Sale By Owner homes quickly realize there is more work involved than they thought.

For those selling FSBO, remember not to cut corners. As we’ve mentioned, make sure your marketing is professional and follow the steps below to ensure the best possible outcome.

1. Determine Your Objective

blond woman with a small house thinking


The marketing process starts well before a home is first listed. You must first determine the main objective of the sale. Is the property being listed for a quick sale or to seek the maximum sale price?

Can you afford to wait for a buyer to pay the full asking price, or should you price the home at or below market value to lower the chance of a delay?

Be sure to know your holding costs when deciding which approach to take. You will still need to pay pro-rated taxes and insurance along with utilities, so waiting may end up costing you more in the end

2. Price the Home

home value is high. real estate prices are going up for a blog post on selling a home fsbo

Igor Kisselev/Shutterstock

Accurately pricing your FSBO home is critical to ensuring you’re taken seriously by buyers and realtors.

If you price the property too high, you risk looking like an amateur, and it’s likely someone will attempt to take advantage of you.

Most owners listing their home For Sale By Owner make this mistake, and you can stand out by being the exception to the rule.

3. Complete a Property Disclosure Form

Real estate homeowner seller property disclosure condition statement with house keys and inspection flashlight on a home owner desk (fictitious but authentic language document)

Olivier Le Queinec/Shutterstock

Before listing your home, a property disclosure form needs to be filled out. This will list any previous or current defects in the home. It’s very important to be honest in this disclosure and always error on the side of caution.

This will give you a chance to disclose to the owner if the house has ever had issues like mold, water leaks, or fires and whether or not those issues have been treated.

While it’s not necessary to disclose minor wear and tear that’s been treated, things like mold absolutely need to be disclosed.

Failure to do so will open the door to a lawsuit, so be truthful in your disclosures. If you don’t know whether a property has had certain issues, you may select “not sure.”

Property disclosures are fairly common, and forms may be obtained on the internet, but we recommend you consult a real estate attorney with any doubts or questions you may have.

4. Prepare the House

Beautiful young woman makes cleaning the house. Girl rubs dust.

Yuganov Konstantin/Shutterstock

After you’ve determined the price, you’ll need some photos. It’s best if photos are taken after the house is vacant, but if this is not an option, ensure you clear the house of trash, straighten pictures, and keep the decorations to a minimum.

While you may appreciate your “unique style,” others may find it tacky. If light bulbs are different hues or burned out, change them. Clean, clean, clean.

While you may not mind smudges on the mirror, a buyer will certainly see them. No imperfection is too small for a buyer to notice, so keep your eyes open for things that appear to be less than perfect.

Tip: Neutralize wild paint colors. Your “unique style” is a turn-off for most buyers. Have a bright red wall? Paint it a neutral grey or beige to ensure you appeal to the widest audience possible.

5. Take Professional Photos

Blogger taking a photo of a modern bedroom

After you’ve prepped the house, you’ll need to create marketing materials. We highly suggest having professional pictures taken by a real estate photographer.

There are plenty of real estate photographers around (do a quick Google search), and this should run between $100 and $200.

This ensures your property and its features are advertised in the best light and shows you took the time to make your property stand out.

If a buyer sees you didn’t take the time to have professional photos taken, they’ll likely wonder what maintenance issues you failed to address.

6. Write Media Content

Online shopping concept. Woman looking for house on real estate market website

Africa Studio/Shutterstock

After you’ve taken photos, write a brief description of the property that highlights it’s best features and reasons why someone would want to choose it.

Don’t be too wordy and get to the point; someone should be able to read the description in 30 seconds or less. It’s best to take a “one size fits all” approach and not target any specific audiences.

Appealing to a broad audience will give you the best chance at finding an interested party, so keep it classy and professional. We’ve created an example for reference.

“Cozy split-entry home in popular Green Acres subdivision offered For Sale By Owner; available for immediate move in. Situated on a 1/3 acre lot overlooking a grove of pine trees, this spacious home features a recently remodeled kitchen with stainless appliances and granite counter tops.

An open floor plan and large picture windows in the living room make this an entertainer’s dream! New roof, gutters, and siding in 2018 and new HVAC system in 2015. Schedule your showing now while this gem is still available!”

7. Publish the Listing

Real Estate red New Listing sign

Feng Yu/Shutterstock

The hard work has already been done, and now it’s time to publish your listing.

We’ll discuss the various websites geared specifically toward For Sale By Owner homes, but before you can publish the listing, you’ll need to gather all relevant information.

Most listing sites have templates to use, which you’ll simply fill out as prompted. This includes number of bedrooms, bathrooms, types of heating and cooling systems, floor coverings, etc.

It’s important to familiarize yourself with all aspects of your home because you will need to advertise this information.

But you’ll also be asked questions about the various systems, their ages, and how they function when showing the unit.

The more information you have, the more confident you will be during a showing, which could ultimately lead to a sale.

8. Look Into Alternative Advertising

To advertise a for sale by owner home, Advertise Advertising Advertisement Branding Concept

In addition to online advertising, you’ll want to place signs in your yard and in any high-traffic area.

You may also publish your home in the newspaper under the “homes for sale” category. It’s important to expose your home to all of these markets.

This way, it’s ensured that both technologically sophisticated and unsophisticated buyers know the home is available. Finally, yard signs are the best way to market your property!

Tip: Looking to save even more money? You can rent tools from Home Depot!

Where to List a Home FSBO

There are a number of ways to advertise your listing, which include websites dedicated to homes listed For Sale By Owner.

While we can’t list them all, we’ve compiled a list of the resources we think are most useful.

This is by far the most popular channel. Many home buyers begin their search on Zillow, as their site is easy to use. It’s free, and you can quickly create a home listing.

Screenshot of Zillow "sell your home" module as featured image on For Sale By Owner Homes feature

While not as advanced as Zillow, Craigslist is free, and owners post here every day. Be cautious, however, as scammers frequent this site and we’ve experienced our fair share of offers from services hoping to assist in sales.

Craigslist housing screenshot of real estate by owner

This service is not free but deserves a shout-out. The site itself is a bit outdated, but the pricing is good, and for only $399.95, you are given access to the MLS. Score!

Their service also syndicates to Zillow, Trulia, and others, which combines a few of these steps into one. screenshot

The FSBO Sales Process

As with the marketing process, attention to detail is key. Remember that by listing your home FSBO, you’ve eliminated the real estate agent.

Most realtors have flexible schedules, which means buyers are accustomed to seeing houses with little notice.

By keeping an open schedule, you will ensure you’re meeting the standards a buyer is used to.

Additionally, make your For Sale By Owner listing stand out by following the steps below:

1. Conduct an Open House

Open House Sign in Front Yard


Holding an open house will not only give potential buyers a chance to see your home, but it will also give you an opportunity to offer more information about the home.

While you may be passionate about your home, be sure not to give too much information about the house.

For example, it’s helpful to know the roof was replaced last year, but not that there was a major hail storm that caused the roof to be replaced.

Some FSBO sellers and realtors like to publish a short information book about the property that lists the age of appliances, standout features, nearby schools, the aforementioned property disclosure, and other information a buyer may find helpful.

It also shows them you cared enough to put all relevant information into a packet. Remember, it’s the small details that make the biggest impact on a buyer.

And don’t forget, door prizes help you gather contact information! Open houses are more of an art than a science, but the most important thing to remember is to keep the conversation light and don’t force anything.

If someone doesn’t like the house, they’ll let you know, so you’ll need to be prepared to hear negative feedback. Most owners listing their homes For Sale By Owner struggle with this, as they are attached to the house.

Whatever you do, don’t take it personally or be combative, as not everyone likes every house they see and is entitled to their opinion.

Just take the feedback with a smile and make a mental note to address any problems that may be preventing the home from selling.

2. Make a Showing Schedule

Real estate agent inviting couple to enter house for visit


In addition to conducting an open house, you’ll want to establish a showing schedule.

Because you’re selling the home For Sale By Owner, you will not have an agent to conduct showings.

Prospective buyers will likely want to see the house outside of normal business hours, so be sure to block off your nights and weekends to ensure nobody skips touring your house because you’re not available.

3. Review Your Offers

Under contract sign on wooden post. Real estate business for a piece on FSBO Homes

Doubletree Studio/Shutterstock

After you’ve done both open houses and private showings, you will begin to receive offers. In hot markets where housing supply is low, some sellers will set a deadline by which all offers will be reviewed.

This creates competition and will cause buyers to “sweeten the deal” by covering a portion of closing costs or offering over the asking price.

We suggest avoiding this tactic in slower markets, as it may turn off an otherwise interested buyer. Many buyers will write a personal note or include a pre-approval note from their lender.

Both of these items show the buyers are serious about their offers, and the pre-approval note shows they will qualify for a loan. This has become standard practice for the last decade, and for good reason.

After all offers are submitted, pick the one that is best for you. As a tip, financing is crucial to most home sales, but be aware of buyers looking to work directly with the owner because they have had trouble qualifying for a loan.

For Sale By Owner homeowners are occasionally approached by buyers with sub-par credit with rent-to-own or seller financing requests.

Be very cautious when receiving these requests, and remember that you are in control of the sale; you don’t have to honor any of these requests.

4. Take an Earnest Deposit

Earnest Money Deposit label and stack of money.

Vitalii Vodolazskyi/Shutterstock

Once the offer letter is accepted, the buyer will provide something known as an earnest deposit. This is simply a gesture of good faith that the buyer is serious about their offer.

It can be monetary (i.e., a check) or non-monetary (like a cheesecake or home-cooked dinner). An earnest deposit can be literally anything as long as both parties agree to it and it’s documented in the offer letter.

Closing a For Sale by Owner Home Transaction

You’ve already done the hard work by marketing the house and securing a buyer.

However, as with everything else in real estate, you’re not done yet. As we’ll state again, this is the most complicated portion of the FBSO home sale.

So we highly suggest involving a professional to facilitate this stage of the process. After all, real estate transactions involve complex paperwork and can be difficult to understand.

1. Pre-Closing Process

Builder And Inspector Looking At New Property as an image for an article on For Sale by Owner Homes


After you’ve accepted an offer, there will be a few items to address prior to closing. First, the buyer will conduct a home inspection, during which a trained inspector will walk in and around the house.

They are looking for code violations or mechanical and cosmetic problems. This gives the buyer a chance to catch any flaws in the house before purchasing it.

If the offer was written “as is,” this means the home is being taken in its current condition, and you won’t be expected to fix any flaws.

If the offer was written “subject to inspection,” the buyer can walk away from the sale as a result of any negative inspection items, though more likely you’ll be asked to either address the items or issue a credit to the sale price.

Remember to be reasonable; it’s not worth spoiling a sale over a minor request, so don’t make things more difficult than they should be.

The second common inspection is called an appraisal, which we talked about earlier in the article. If the buyer has taken out a mortgage, the lender will want to make sure the property is worth at least the price of the loan.

This way, they are limiting their downside in case the borrower defaults on the loan. Your FSBO home sale is similar to a conventional home sale, so this requirement should come as no surprise.

2. Paperwork

Young woman is signing financial contract with male realtor. Close-up.


After you’ve agreed on the terms of the inspection results, it’s time to conduct the closing paperwork. We highly suggest involving a closing company or an attorney who will manage the closing process from start to finish.

Completing closing paperwork requires both experience and attention to detail, and any mistakes can be costly, so it’s best to leave this portion to the professionals.

Whether a home was sold For Sale By Owner or conventionally, the same closing documents are required to be completed.

Most will be foreign to you, and as we said above, we highly suggest hiring a closing company or real estate attorney. The most commonly used documents are listed below:

  1. Deed transfer
  2. Title report
  3. Mortgage loan information
  4. Final purchase and sale agreement
  5. Property tax information
  6. Insurance information
  7. Home improvement receipts, along with any other documentation relating to the property, such as home warranty documentation
  8. Closing cost summary forms (one prepared for each party)

3. Closing Day

As the final step for closing on a FSBO home, Home for sale. Sign in front of new home


After all forms have been completed by the seller, the buyer, their lender, their realtor (if applicable), and a closing representative will meet on a pre-determined date and time to complete the remaining paperwork and finish the sale.

During this process, the title company or attorney will officially transfer the deed and register it with the appropriate government office. The buyer will then be listed as the owner of the record.

After the mortgage balance and closing costs have been paid, the seller will receive a check for the proceeds, and the new owner will assume responsibility for the utilities, insurance, taxes, and maintenance of the home.

Keys will be handed over, and with that, you’ve just sold your home without a realtor!

Additional For Sale by Owner Resources

While we’ve included the basic process for listing a For Sale By Owner home, there are many companies that sell items like signs, banners, and other materials.

We have included a few of our favorites and listed a recap of what each has to offer.


Vistaprint: We’ve used this service for shirts, business cards, and, most importantly, real estate signs! Design is easy, and pricing is competitive.

They sell every marketing material imaginable and only require one image upload to be used across products. We highly recommend this company!


PostcardMania: This company makes it easy to buy mailing lists and send postcards in the same transaction.

We paid $1,500 for 2,000 postcards, which included the design and the mailing list. You can’t beat the value of the money here.

Should I Sell My Home For Sale by Owner?

While it seems daunting, selling a FSBO home can be done without prior real estate experience.

For most homeowners, the time required outweighs the cost savings, but for the courageous few, it’s worth the risk.

We hope that whether you are a seller, buyer, or just someone looking for more information about For Sale By Owner homes, our guide has helped answer any questions you may have.

Make sure to check out the other resources on our site, and feel free to send us a message if you want to learn more!