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Should I Do For Sale by Owner?

So you’re ready to sell your house and you’re wondering, Should I do For Sale by Owner (FSBO)? After all, maybe you’re already a pro at selling used stuff like furniture, treadmills and antique gumball machines.

But is selling something as expensive as a house really as easy as planting a sign in your yard and waiting for buyers to stroll in? (Somewhere a real estate agent is laughing.) But seriously, selling a house is one time when you should always have a professional on board.

Let’s find out why.

What Is For Sale by Owner, Exactly?

First, let’s start by defining For Sale by Owner. In the real estate biz, For Sale by Owner or FSBO (pronounced “fiz-bo”) is when the owner of a house sells it on their own—without any representation from a real estate agent. You may have even seen yard signs with those exact words: "For Sale by Owner.”

Is For Sale by Owner Worth It?

Most home sellers decide FSBO isn’t worth it because it’s more of a hassle and you walk away with less money. Last year, less than 1 in 10 home sellers went the FSBO route and sold their homes at a median price that was 11% less than those who sold with a real estate agent.1

For perspective, let’s pretend the same trend continues this year. If you could sell your house for $218,000 by doing FSBO, then an agent would probably be able to help you sell the same house for $242,000—meaning you’d earn $24,000 more by selling with an agent! Sure, you’d lose 6% of your total profit to agent commissions. But that still leaves you with nearly $10,000 more than what you would’ve gained by selling your home the FSBO route.

Bottom line: Selling a house by yourself instead of using an agent usually means missing out on tens of thousands of dollars in profit—don’t do it!

Why Do People Choose For Sale by Owner?

Okay, if doing FSBO is a bad idea, why would anyone choose it? Here are some reasons why people make the mistake of doing FSBO:

Reason 1: To Cut Out the Agent’s Commission

You might think you can save money by avoiding the commission fee you’d pay to a real estate agent. But remember, an agent who eats, sleeps and breathes real estate will be able to help you sell your home for tens of thousands of dollars more than you can by selling FSBO. And let’s not forget that even after you pay the average agent commission, you’ll still walk away with more money than you would’ve by going the FSBO route.

Reason 2: You Already Have a Buyer Lined Up

You might have a buyer already lined up and don’t think you need a real estate agent. Maybe you’ve agreed upon the purchase price and think you’ve just got the inspections, appraisals and paperwork to complete. (That’s still a lot of stuff left to do!)

But things can and do go wrong when you’re selling a house—even if you think the paperwork part will be a breeze. With no agent to safeguard your legal liabilities, you’re on your own if the deal falls through.

Reason 3: To Speed Up the House Sale

FSBO homes do have a track record of selling faster than agent-assisted homes. In fact, most FSBO homes sold a week faster than agent-assisted homes last year—keep in mind, most of those FSBO homes sold to a buyer who the seller already knew.2 So FSBO might speed up your sale if you have a buyer lined up. But is that really worth selling it for way less money?

Reason 4: You Think It’s an Easy Job

You might believe the real estate business looks pretty easy. You feel confident about pricing your home, taking a few pictures, getting it on the market, and finding a buyer. The truth is you probably don’t know as much about real estate as an agent who does this day in and day out. And that means it’ll be way too easy to make major home-selling mistakes.

Find expert agents to help you sell your home.

For example, you might accidently price your home so low that you’re giving it away, or price it so high that nobody shows any interest. It’s an agent’s job to know your local housing market like the back of their hand. They’ll be able to give you access to way more buyers than you can find by selling the house on your own.

How to Do FSBO

Remember, FSBO isn’t like selling lemonade—it’s practically a full-time job. From all the work involved in getting a house on the market, finding a buyer, and getting into the contract stage all the way to closing day, there’s a lot to do before and after the sale.

Here are some things you’ll need to do on your own if you do FSBO:

  • Price your home competitively. Remember, pricing your home wrong could scare away buyers or make you miss out on tens of thousands of dollars! If you worked with a real estate agent instead of doing FSBO, your agent would have data to compare your home to similar homes that recently sold in your area—so you could price it right from the start.
  • Stage your home for buyers. Okay, your next step will be to decide if you need to make any improvements to your home before putting it on the market. And you’ll want to do some home staging to make it more appealing online and for viewings. Again, an agent’s advice here would help you know what other buyers expect of a home in your area.
  • Find buyers by posting online and doing open houses. To find buyers for your house, you’ll want to post photographs and virtual tour videos online. You’ll also need to arrange for home showings. This would be a lot easier if you worked with an agent who has access to a network of other agents and contacts of buyers who are actively searching for a home. An agent would also arrange and supervise viewings and open house events on your behalf, which would allow you to go to work and avoid taking days off.
  • Pick a legit offer and negotiate price. Next, you’ll want to pick an offer from a buyer who has a mortgage preapproval letter to avoid problems down the road. Then you’ll need to negotiate the price (this part can go back and forth). The deal could end up hanging on the results of a home inspection—which means you might need to decide between making some repairs or settling for a lower price. Trust us, when you’re negotiating a deal this big, you want a pro on your side who has done it many times before.
  • Manage mountains of paperwork and boring legal stuff. If you do FSBO, that means you won’t have an agent to keep track of all the paperwork or someone to let you know when things are due or missing. You’ll be responsible for getting the purchase agreement or contract drawn up with all the specifics you and the buyer agree upon at the start of the deal.

Bottom line: If you do FSBO, you’ll be on your own when it comes to some pretty complicated tasks that make up the home-selling process.

With the right agent, taking on the housing market can be easy.

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Why You Should Use a Real Estate Agent

By now you can probably see how selling a house by yourself is a massive process that can lead to costly mistakes—if you don’t already sell houses for a living. Remember, if you use a real estate agent, you’ll come out of this deal with more money compared to FSBO—even though you’re paying commissions to both the buyer’s agent and your own. It makes financial sense to use an agent, and it saves you a lot of work in the process.

Here are some other benefits of selling with an agent:

  • You won’t have to take on the full-time job of being an agent on top of your regular day job.
  • You can feel secure about your legal standing with an agent on board to dot those i’s and cross those t’s.
  • Your home listing will reach a much larger market.

All in all, your home-selling experience is going to be way smoother and you’ll walk away with more money if you use a real estate agent instead of going the FSBO route.

Find the Best Real Estate Agents Right Here

If you want to make more money and save yourself a load of hassle, sell your house with a real estate agent. For a quick and easy way to find the best agents in your area, try our Endorsed Local Providers (ELP) program. You can trust these pros to help you get the most money for your home and to take care of you every step of the way.

Find an experienced real estate agent near you!

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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