When the time comes to move, some tenacious homeowners are eager to take over the reins of their home sale and figure out how to sell a house by owner.
A house is typically a person’s largest financial asset, and the decision to sell solo is often understandably driven by a desire to save on commission fees and pocket more equity from a hard-earned investment.
Recently, a blazing hot real estate market and steep rise in equity adds extra incentive to maximize profits.
Impulsive home purchases also weren’t unheard of during the pandemic, so maybe you haven’t owned your house very long and are concerned about covering the cost of selling your house.
With millions of homes sold each year, a modest portion of sellers — about 7%-8%, historically — choose to list “For Sale By Owner” (or FSBO — pronounced fizz-bow).
While the method can work, it does come with some risks. Selling a house is a pretty rare event for most people, so you don’t know what you don’t know.
In this 2022 guide to selling FSBO, we’ll cover what can be the most difficult aspects of selling by owner, including the steps that might be harder than you think. We’ll also provide a comprehensive overview on the full process to prep, market, and close on your home without the assistance of a real estate agent.
Find a Top-Rated Real Estate Agent Near You
FSBO listings statistically sell for less than agent-assisted sales. HomeLight analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.
Note: Once you’ve seen what’s required, you can roll up your sleeves and get started with your FSBO sale. Or — in the event you’d prefer to work with a real estate agent — HomeLight would be happy to introduce you to highly-rated professionals who can help you command top dollar and provide a low-stress selling experience.
How does selling by owner (FSBO) work?
Disclaimer: While this is a general guide, rules concerning FSBO sales and yard signs may vary state-by-state or even from MLS to MLS, while each state has its own regulations for what sellers are required to disclose to buyers. HomeLight always recommends that you look into the local regulations for your area and when in doubt, consult with a legal advisor.
FSBO is a method of selling your home without the involvement of a listing agent. In a FSBO scenario, the seller assumes the responsibilities that would normally fall to their agent such as pricing the home, arranging showings, and negotiating the deal.
In an agent-assisted sale, the seller typically pays a commission amounting to around 6% of the sale price, which is then split 50/50 with the buyer’s agent. That 6% is deducted from the seller’s proceeds at closing. By selling FSBO, a seller can eliminate the cost of the listing agent commission (so around 3%), though they may still need to offer a buyer’s agent commission.
Buyer’s agents will expect compensation for the work they do to bring a buyer to a sale, such as arrange showings and help to tee up and qualify the buyer. Plus, when a seller isn’t working with an agent, the buyer’s agent may end up carrying more of the weight to get the deal to the finish line.
Next: Consult our guide on who pays closing costs when selling a house by owner for more details.
Finally, a FSBO sale does not mean that a seller won’t need any professional assistance. Not all states require sellers to hire a real estate attorney, but FSBO sales typically warrant legal and professional oversight of some kind to avoid an abundance of legal risk.
Most people who sell by owner will need to hire an attorney to review and prepare key documents and make sure paperwork is filled out properly, such as the seller’s disclosures.
Why sell a house by owner?
The top three reasons people cite for selling FSBO include: “did not want to pay a commission or fee” (36%); sold to a relative, friend, or neighbor (30%); or that the buyers contacted the seller directly (8%), according to data from the National Association of Realtors (NAR).
To get a firsthand perspective, we spoke with Heath Fields, who recently closed on a $450,000 home sale in Knoxville, Tennessee — his third FSBO experience.
We also spoke with Tracey Todd, a top real estate agent in Gainesville, Florida, who sells homes more than 53% quicker than the average Gainesville agent.
Todd says FSBO sellers he encounters want to “make as much money as possible. And they feel like they can do it faster by cutting out the middleman.”
However, 2021 data from NAR shows that “FSBO homes sold at a median of $260,000 last year, significantly lower than the median of agent-assisted homes at $318,000.” An independent study from 2016 to 2017 bears this out: FSBO homes sold for an average of 5.5% less than agent-marketed sales.
As you can see, FSBO is a mixed bag. So, before the tips, let’s lay out some pros and cons to help you decide if this is the route for you.
Pros of selling a house by owner
- Ability to save on listing agent commission fees, usually around 3% of the sale price.
- You’re completely in charge and can manage the sale as you please.
- No “go-between” in your communications with buyers.
Cons of selling a house by owner
- FSBO listings tend to sell for less, statistically speaking.
- Unless the seller already has a buyer lined up, FSBO listings can take longer to sell. For example, Todd says FSBO homes in Gainesville spend 30-40 extra days on the market.
- Managing all communications and negotiations yourself is time-consuming. Not having a communication buffer can be a downside if the buyer pushes back or says negative things about your property.
- You’ll be negotiating without help from an expert, which could mean leaving money on the table.
- Setting the listing price is challenging — you may be tempted to go too high. You could also risk under-selling with a low price.
- Marketing your home is time-consuming.
- You’ll still have selling costs, which may include transfer taxes and settlement fees. Not having agent representation could also lead to paying more in seller concessions.
In spite of the cons, we’ll help you navigate the challenges of FSBO if you’re committed to selling your house without agent assistance.
Steps to sell a house by owner
Next, let’s review the FSBO process step by step.
1. Prepare your house for sale
Whether you’re selling with an agent or FSBO, at a minimum you’ll want to get your home into respectable shape before any showings to increase your chances of receiving a fair price. Here are a few standard tasks to add to the list.
Indoors
These efforts will go a long way toward impressing buyers:
- Declutter floors, shelves, and surfaces throughout the home.
- Make small fixes and repairs, like a leaky faucet or broken door handle.
- Lightly update with new light fixtures, faucets, or cabinet hardware.
- Refinish hardwood floors.
- Repaint bold walls (or those that look dingy) in a neutral color.
- Reduce furniture in crowded rooms — consider a temporary storage unit.
- Stage the home with final touches like fresh-cut flowers or a basket of fresh produce.
- Use rugs to define spaces and place them strategically.
- Deep clean until the house is sparkling.
Outdoors
Data from HomeLight’s 2022 Top Agents Insight Report shows that on average, “Buyers will pay 7% more for a house with great curb appeal versus a home with a neglected exterior.”
Some important curb appeal upgrades can include:
- Mow the lawn and pull weeds.
- Apply fresh mulch liberally.
- Upgrade your landscaping. Consider a new walkway, flowerbed, or shrubs.
- Add a fresh coat of exterior paint.
- Install a new garage door if yours is looking old or not working properly.
2. Do the homework necessary to set a competitive price
You’ve arrived at a critical moment in your FSBO process: setting a listing price. You don’t want to leave money on the table, yet you want to encourage activity on your listing.
Before listing a home, an agent usually conducts a comparative market analysis (CMA). This is a highly-detailed study of “comps” — similar homes nearby that have sold recently, are pending, on the market, or were previously listed but taken off the market. Some may have even been pulled off the market without a sale.
Without an agent, you’ll miss out on the complexity of a full CMA and the know-how to interpret it.
However, with a little time and money, you can set a competitive price yourself.
Conduct your own “CMA Lite”
It’s time to roll up your sleeves and research.
Start with an online home value estimate
As a starting point, look at several online estimators for your home’s value. HomeLight’s Home Value Estimator aggregates publicly available data such as tax records and assessments, your home’s last sale price, and recent sales records for other properties in the same neighborhood.
Need Help Pricing Your FSBO Listing?
Start with our Home Value Estimator for a near-instant price check. HomeLight’s tool uses recent sales records, market trends, and your home’s last sales price to provide a preliminary estimate of value in under two minutes.
We also add a new layer of information to our estimates using a short questionnaire. Tell us a few details about your home, such as:
- How much work does it need?
- What type of home is it (single-family, condo, townhouse, or other)?
- Roughly when was your house built?
- Are you planning to sell soon?
Using these insights, we’ll provide you with a preliminary estimate of home value in under two minutes.
Whether you use Zillow, Chase, Realtor, or Redfin to get a home value estimate, think of any online home price tool as a first step (not your only source of truth) — and recognize that the data used may be limited.
Narrowly filter your search for comps
When you’re ready to find comps, you can choose from sites like Zillow, Trulia, Redfin, or Realtor.
You’ll want to filter your searches to the area very near your house (within blocks if possible) and with similar characteristics. If you’re not finding any comps, expand your search map.
You’ll also want to filter results by details like:
- Listing status (look at recently sold, pending, and active)
- Number of bedrooms
- Number of bathrooms
- Square footage
- Home type (single-family, condo, etc.)
Beyond the above criteria, the more houses you find with floor plans and an age similar to yours, the better.
Use a site like Zillow to collect your data
As an example, let’s take a look at how to filter your search for comps on Zillow.
- Navigate to Zillow.
- Type in your address. If a pop-up with your home’s specs appears, close it.
- Filter by “sold.” Yellow dots should appear on the map surrounding your house.
- Now, filter by the number of bedrooms and bathrooms and check the box “Use exact match.”
- Next, filter by home type.
- Next, select the “More” box. Here you can specify square footage, lot size, year built, and — crucially — the “sold in last” (time period) category.
- Scroll down and select to view houses that sold in the last 30 days.
- If you find there are not many results in your area, try expanding to 90 days. However, the further back you go, the less relevant the comps.
- If necessary, click the plus or minus buttons to widen the search area.
- Once you’ve collected data for sold houses, revise or restart the search to view active and pending listings, as well.
Invest in an appraisal
If you want to further reduce guesswork, Todd recommends paying an appraiser to provide a professional opinion of value for your home. An appraiser will combine recent property data, research of the surrounding market, and information collected from a walkthrough of your home to determine appraised value. For a single-family home, an appraisal will likely cost $500 to $600 — well worth it to avoid possibly over- or underpricing your house by thousands.
Make sense of the research
Compare your home’s features against the nearby comps you collected. Hopefully, the houses you studied give an indication of an appropriate price range for your home. From there, you can make dollar adjustments based on characteristics that add value (patios, curb appeal, an extra bedroom) versus detract from it (a busy street, deferred maintenanced, less square footage).
Consider the differences and similarities of comps with the appraised value of your home to choose a price that will encourage activity (too high and it may seem out of reach to many buyers) but will also maximize your profit.
3. Photograph your home
Listing photos are powerful, either pulling in buyers for showings or keeping them away.
To give your listing an edge, consider hiring an experienced real estate photographer. While they may charge as much as $100 to $125 an hour, “putting in my time to have professional pictures taken of my home was worth it,” says Fields.
But if you do go the DIY route, make sure to:
- Use a good camera with a wide-angle lens.
- Pay attention to lighting.
- Include a photo of every room.
- Take multiple pictures of living areas, kitchens, and bathrooms.
- Try shooting different angles.
Review our guide on how to take quality real estate photos for further guidance.
4. Create a detailed, compelling listing
Along with stellar photos, you’ll want to craft an informative and compelling listing. Leverage both the listing description (a paragraph or two highlighting key features) and the property details to show potential buyers all about your home and what makes it desirable.
Tell a story with your description
Draw in potential buyers with a powerful listing description which tells a story about your house, including details like:
- Your home’s most unique and desirable features, like a breakfast nook or sunroom
- Recent upgrades like a kitchen or bathroom remodel or new roof or HVAC system
- High-end appliances, materials, or finishes
- Outdoor features like a pool or patio
- Neighborhood features and amenities
- Nearby parks, walking trails, restaurants, and attractions
Lastly, and this is crucial: specify in your description whether a buyer’s agent will receive commission from the proceeds. Most agents don’t want to show their clients properties from which they’d receive no commission. You can decide not to offer a buyer’s agent commission, but recognize that doing so could limit your buyer pool as buyer’s agents typically expect to be compensated for their efforts.
Don’t skimp on the property details
Aside from writing the description, you may be prompted to enter information like:
- Age of the home
- Square footage
- Architectural style (i.e. split-level, rancher, craftsman)
- Appliances included
- Exterior building materials
- Flooring types
- HOA fees
- School zone information
- Lot size
Many real estate agents and potential buyers really do read this “fine print” on your listing — so include accurate details, and plenty of them.
5. List your home online
It’s finally time to post your home online. While you can create FSBO listings for free on popular search sites, you’d have to painstakingly post site by site, and your listing wouldn’t reach the majority of buyers and agents.
To give your home the most exposure, pay to have your home put on your local MLS (multiple listing service) -– a platform agents use to share properties with one another as well as major real estate sites. Posting there will feed your listing to buyers’ agent databases and to common sites buyers use.
Only licensed real estate agents and brokers who are MLS members can post to the MLS. However, you have two options to gain access: paying an agent to post for you or using a FSBO platform online.
Pay an agent to list your home on the MLS
A local agent may be willing to list your house on the MLS for a flat fee, without any other involvement in your real estate transaction. If you decide to go this route, make sure you ask whether the fee includes updating your listing if necessary.
Use a FSBO platform with an MLS option
There are a variety of paid FSBO websites that allow you to list your house online, with packages ranging from about $100 to $400.
Whatever you choose, read the fine print carefully: some sites may have hidden fees or even take a percentage off your sale – a detour you’d rather avoid on the FSBO route.
Not willing to pay for the MLS?
If you’re determined to save money by foregoing the MLS, creating a free FSBO listing on Zillow may be your top option. You can post video and unlimited photos, and get fairly wide exposure via Zillow and the Zillow-owned Trulia.
6. Market your home
Time to spread the word. “Marketing,” Todd advises, “is still key even in the hottest markets in the world.”
So, beyond listing on the MLS, what else can you do to market your home?
Place a nice FSBO sign by the road
Consider getting a custom yard sign rather than purchasing a generic one you write on with Sharpie. You can order a custom sign on a site like Vistaprint with your contact information, plus a stand, for as little as $25 plus shipping. Note that some MLSs may have rules about whether you can post a FSBO yard sign while your home is on the MLS.
Share on social media
Fields says that “having great relationships with people on social media who shared the listings” was a key factor in his FSBO success. So be sure to share your home across social media – and ask your friends to share, too.
Hold an open house
Try these strategies for a successful open house event:
- Share details on Facebook and Nextdoor.
- Update your MLS listing with the open house details (if you’re able to as part of paying the flat fee), or update your DIY FSBO listing.
- Place open house signs at nearby intersections.
- Tidy up the house before potential buyers come through.
- Pass out info sheets with the address, bullet points about the house, your contact info, and perhaps one photo.
- If you can, collect visitors’ info — then follow up later to ask if they have any questions.
Here are more tips for how to do an open house.
7. Manage showings
Score! The marketing worked, and your phone is buzzing. Welcome to the busiest phase of the process. In fact, according to Todd, a major reason some FSBO sellers switch to an agent is that “they underestimated the time and energy they would have to spend managing the noise.”
To manage the logistics of showings:
- Respond to inquiries ASAP.
- Set end times if you need to fit many showings in one day. This will also create a sense of demand and urgency for buyers to place offers.
- Remove or secure valuables.
- Make sure the home is clean and tidy for showings.
- Follow up with buyers’ agents after showings to get their feedback.
Should you be present for showings?
If you’d rather not be present for every showing, consider using a lockbox with a code to let buyers’ agents enter the house. This is standard industry practice among agents. To ensure you’re working with someone legitimate, use Google to check their real estate license number.
With unrepresented buyers, plan to be on the property for the showing. During a showing, we recommend you:
- Point out a few highlights of the house.
- Let buyers look without hovering.
- Be prepared to answer questions.
- Avoid the temptation to tell all — let the house and listing do the talking.
8. Evaluate offers and negotiate a deal
You’ve got your first offer — congratulations! Before signing anything, here are key considerations:
- Vet potential buyers by requiring a mortgage pre-approval letter or proof of funds.
- Require everything in writing.
- Remember you can counter-offer and negotiate.
- Look for a good real estate attorney. (See the next step!)
9. Close the sale — with professional help
Time to button up that deal.
Todd recommends every FSBO seller hire a lawyer to minimize risk and settle the legal documents. Real estate attorney fees vary widely depending on location and how much help you want. Generally, they range from $150 to $350 per hour — well worth it for professional guidance in closing one of life’s largest legal transactions.
FSBO mistakes to avoid
On your FSBO journey, watch out for these major pitfalls:
- Missing out on the MLS.
- Forgetting or refusing to pay the buyer’s agent commission.
- Over- or under-pricing.
- Letting your house sit on the market too long. According to Todd, lack of activity is a common reason FSBO sellers come to him for help.
Lastly, “don’t get greedy,” Fields cautions. In his case, he turned down a full-price cash offer the first day thinking he might get more. After another month, Fields accepted and closed on a different full-price cash offer — wishing he’d saved himself that extra month of work.
Alternatives to selling by owner
If you decide you don’t want the hassle or pressure of FSBO, you’ve got other solid options.
Enlist the help of a top-rated real estate agent
Ultimately, the services and price gains you can get with an experienced real estate agent may put more money in your pocket than FSBO.
Todd tells the story of a FSBO seller-turned-client whose home sat on the market for 180 days. After lowering the price a total of $50,000, the seller asked for Todd’s help. A walkthrough revealed carpet in a bathroom and other little things the seller hadn’t improved.
“If you put about $7,000 to $10,000 back into your home,” Todd advised the seller, “we can list it for about 20 to 30 grand (above) what you previously had.”
Todd promised the skeptical client that if he was wrong, he’d reimburse the $10,000. Ultimately, after 30 days to make the recommended updates, the home “sold for $10,000 above what they had originally asked for, and it was under contract in 10 days.”
Interested in such expertise? We offer a 100% free agent matching service tailored to your needs to help you find an expert local agent. It takes only two minutes to receive your matches.
Request a cash offer
If you’d like to skip the sale prep altogether — plus avoid paying agent commissions — you can opt to sell your home “as-is” to an all-cash buyer instead.
For a low-stress experience, consider requesting a cash offer from HomeLight’s Simple Sale platform. Tell us a few details about your home, and in as few as 48 hours, we’ll send an offer your way. If you decide to accept the offer, Simple Sale sellers have the ability to close in as little as 10 days.
Sell Without a Realtor: Get an All-Cash Offer
Avoid agent commissions by selling through HomeLight’s Simple Sale platform. Skip stagings, showings, and open houses and receive a full cash offer in as few as 48 hours.
Without leaving the Simple Sale platform, you’ll also be able to compare your cash offer to an estimation of what your home would sell for on the open market so you can make an informed decision.
Ready to sell your home?
Unless you already have a buyer lined up, selling a house by owner requires a significant investment of time and effort. You’ll need to pull your own comps, capture excellent pictures, create a listing, market the house online, field inquiries, negotiate, and close the deal. And that’s after preparing the house itself.
You also have to consider that FSBO listings tend to sell for less than agent-assisted sales. An experienced agent who knows the area can make recommendations for targeted upgrades to help you maximize your sale price and get a premium offer. This can help to offset or, in some cases, more than make up for the cost of commission — while saving you time and headaches.
If you chose to go FSBO, you should have a good idea now of what to expect from the process. Otherwise, our internal transaction data at HomeLight shows that the top 5% of real estate agents sell homes for as much as 10% more than average, and we’d be happy to make an intro to some of the best agents near you.
Header Image Source: (karamysh / Shutterstock)
