For Sale By Owner (FSBO): What You Need to Know as a Seller or Buyer
- Phoenix S. Ayotte, Esq.
- Jul 13
- 6 min read
Selling or buying a home is one of the most significant financial decisions a person can make. While most homeowners choose to work with a real estate agent, attempt to sell it independently as a For Sale By Owner (FSBO) to save on commission fees and maintain full control over the process. However, FSBO isn’t for everyone—it requires time, effort, and a deep understanding of the real estate market. For buyers, encountering an FSBO home means navigating the process with fewer intermediaries, but potentially more uncertainty.
In this blog, we’ll explore the pros and cons of FSBO, compare it to working with a real estate agent, and provide essential tips for both sellers and buyers considering this route. Whether you're looking to maximize profits or find a great deal, understanding FSBO can help you make an informed decision.
What Is For Sale By Owner (FSBO)?
For Sale By Owner (FSBO) is a real estate transaction where the homeowner sells their property without the assistance of a listing agent. Instead, the seller takes on all responsibilities, including:
Pricing the home (researching comparable properties, hiring an appraiser)
Marketing and listing (professional photos, online listings, open houses)
Negotiating offers (handling buyer inquiries, counteroffers)
Handling paperwork (contracts, disclosures, closing documents)
According to the National Association of Realtors (NAR), FSBO transactions accounted for just 6% of home sales, an all-time low. Sellers typically choose this route to avoid paying agent commissions (typically 5-6% of the sale price). The NAR report reveals that:
38% chose this route because they were selling to someone they knew (relative, friend, or neighbor)
30% wanted to avoid paying a commission or fee
The remaining sellers cited other reasons, including already having a buyer or preferring to handle the sale themselves
However, FSBO isn't a one-size-fits-all solution. Like skipping a realtor to save on commission? Great. Prepared to become a part-time marketer, negotiator, and legal coordinator? That's where it gets tricky.
Benefits of Selling FSBO
1. Avoiding Listing Agent Commissions
The biggest draw of FSBO is saving on real estate agent fees, which can amount to $15,000–$30,000 on a $500,000 home. By cutting out the listing agent, sellers keep more of their profits.
However: Buyers’ agents still expect a 2.5–3% commission, so sellers may need to account for that in negotiations.
2. Full Control Over Pricing & Marketing
Without an agent, sellers set their own price, choose how to market the home, and decide on showings. They can:
List on Zillow, FSBO websites, and social media
Schedule open houses at their convenience
Negotiate directly with buyers
But be cautious: Overpricing can lead to a stale listing, while underpricing may mean leaving money on the table.
3. Direct Communication with Buyers
FSBO sellers interact directly with potential buyers, answering questions about the home and neighborhood. This can create a more personal selling experience.
4. Faster Decision-Making
Without waiting for an agent’s availability, sellers can quickly respond to offers, schedule showings, and adjust strategies.
Challenges of Selling FSBO
1. Limited Market Exposure
Most buyers find homes through the Multiple Listing Service (MLS), which requires an agent to list. FSBO sellers may miss out on serious buyers unless they pay for flat-fee MLS listings (typically $300–$1,000).
2. Pricing Difficulties
Agents have access to real-time market data and experience pricing homes competitively. Without this expertise, FSBO sellers risk overpricing (leading to no offers) or underpricing (losing potential profit).
3. Negotiation & Legal Risks
Buyers’ agents may push for lower prices, knowing FSBO sellers lack negotiation experience.
Legal paperwork errors (missing disclosures, improper contracts) can lead to lawsuits or delayed closings.
4. Time & Effort Required
FSBO demands significant effort—from staging and photography to handling inquiries and paperwork. Many sellers underestimate the workload.
While FSBO can work for some, the majority of sellers still choose to list with an agent, and with good reason.
Benefits of Hiring a Real Estate Agent:
Market Knowledge & Pricing Strategy: Agents use comparative market analyses to determine competitive and realistic prices.
Marketing & Visibility: Access to the MLS, professional networks, and established marketing platforms ensures more eyes on your listing.
Professional Negotiation: Experienced agents can help evaluate offers and navigate counteroffers objectively.
Transaction Management: From contracts to closing, agents coordinate with title companies, lenders, inspectors, and appraisers to keep the deal on track.
Legal Protection: Agents help ensure compliance with disclosure requirements and other legal obligations.
It’s worth noting that good agents work as partners—not just salespeople—and their commission should reflect the value they add, not just the time they spend.
FSBO for Buyers: What to Expect
When a buyer considers an FSBO property, the experience can differ notably from working with an agent-represented listing.
Tips for Buying FSBO:
Get pre-approved to show you’re a serious buyer.
Hire an inspector to uncover hidden problems!
Consider an agent (seller may still pay their commission).
Review contracts carefully (or hire a real estate attorney to draft, review, and assist).
Advantages for Buyers:
Potential cost savings. FSBO homes often sell for less than agent-represented listings.
Direct negotiation with the seller. Buyers may appreciate straightforward communication.
Possibility of less competition. FSBO properties are often not as widely advertised, reducing bidding wars.
Challenges for Buyers:
Pricing uncertainty. FSBO homes may be inaccurately priced.
Legal and paperwork concerns. Sellers may not be familiar with all required disclosures or documentation (a real estate attorney can help protect your rights).
Unrepresented negotiation. Without a buyer’s agent, the buyer might not have an advocate during negotiations.
Commission confusion. The seller may try to avoid paying the buyer’s agent’s commission, indirectly shifting the cost to the buyer.
For these reasons, it is often advisable for buyers to work with their own agent, or at the very least a real estate attorney, even if the seller is not represented. The commission for the buyer’s agent is typically still paid by the seller, even in FSBO transactions.
Tips for a Successful FSBO Sale
1. Price It Right
Use Zillow, Redfin, and Realtor.com to compare similar homes.
Hire an appraiser ($300–$500) for an unbiased valuation.
2. Market Effectively
High-quality photos & virtual tours attract more buyers.
List on FSBO-friendly sites (Zillow, Craigslist, FSBO.com).
Use social media & yard signs to drive interest.
3. Offer Buyer’s Agent Commission
To attract more buyers, offer 2.5–3% commission to their agents.
4. Prepare for Negotiations
Know your bottom-line price.
Be ready to handle lowball offers & repair requests.
5. Hire a Real Estate Attorney
A lawyer to draft and review contracts, advise on contingency deadlines, and ensure a smooth, legal closing.
The Closing Process: What to Expect
Whether selling FSBO or with an agent, the process includes many formal steps:
Offer Negotiation: Agree on price, contingencies, and timelines.
Inspections and Appraisals: Buyers often order home inspections and appraisals. Repairs may be requested. Contingencies deadlines must be met.
Escrow and Title: Funds and documents are held by a neutral third party while legal checks (like title searches) are completed.
Note: Regardless of whether you work with a realtor or close through FSBO, you will still have to go through a title agency, and will have normal closing costs (less commissions). If you are working with a real estate attorney, consider working with their trusted title partners so they can keep a close eye on your transaction.
Signing and Closing: Once everything is verified, documents are signed, funds are transferred, and the keys are handed over.
Sellers and buyers alike may want to consult a real estate attorney to ensure everything is handled correctly and legally.
Is FSBO Right for You?
FSBO can be a great way to save money, but it’s not without risks. Sellers must be prepared to handle marketing, negotiations, and legal paperwork, while buyers should do extra due diligence when dealing directly with sellers.
If you’re unsure, consulting a real estate attorney or agent can help you navigate the process smoothly. Whether you choose FSBO or an agent, the key is being informed and prepared for a successful sale or purchase.
Need Expert Guidance?
If you’re in Virginia, Maryland, or Washington, D.C. (DMV) and need legal guidance for a For Sale By Owner (FSBO) transaction, Phoenix S. Ayotte, Esq. of Future Counsel is here to help! FSBO deals can be rewarding, but they also come with legal responsibilities that shouldn’t be overlooked. We help ensure your contracts are sound, your disclosures are complete, and your closing process is smooth. With professional legal support, you can move forward confidently, knowing your interests are protected every step of the way.
