For Sale by Owner: Proceed with Caution

Blog posted On July 19, 2018

Home sellers choose the “For Sale by Owner” (FSBO) route because they believe they will earn a larger profit by not having to pay their real estate agent a commission fee.  FSBO transactions tend to become even more popular in a seller’s market.  In 2016, the National Association of Realtors (NAR) reported the average FSBO sales price was $185,000, compared to the average $245,000 for a home represented by a real estate agent.  A staggering $60,000 difference, even despite the commission cost for the real estate agent.  

When selling a home, even in a seller’s market, partnering with an established real estate agent has distinct advantages over going it alone.  Here are the top four services a real estate agent provides:



Most buyers start their home search online or on their mobile device.  Listing the home yourself will not get the same level of exposure as a home listed by a real estate agent.  Almost all real estate listing websites will charge a hosting fee and some popular websites are restricted to homes represented by a real estate agent, because they pull listings directly from the multiple listing service (MLS).  Once the home is listed, in a FSBO transaction, you will also be responsible for fielding inquiries and following up with leads.  For real estate agents, this is their full-time job, and they are well-equipped to respond to buyers and set up showings in a timely manner.  Chances are, you have your own full-time job, which will limit the amount of time you have to reply and follow up.  In today’s busy housing market, a timely transaction is critical.


Owners who choose to sell their homes without a real estate agent will most likely turn to a free online assessment tool to price their home.  Unfortunately, these services may give the owner an inaccurate estimate of the value of their home.  When a home is overpriced, it can stay on the market longer, and prospective buyers could become suspicious about why it hasn’t sold.  When a home is underpriced, the seller is putting themselves at a financial disadvantage.  A real estate agent has access to detailed pricing algorithms and knows your local neighborhood.  They will also handle the negotiations with the buyer’s agent. 

Staging Costs

When selling a home, typically you will have to invest in some staging costs.  This does not necessarily mean totally overhauling outdated décor.  While all home buyers will have their own specific preferences, fixing small details like an unkempt yard, mismatched paint job, or broken doorbell are affordable.  Without guidance, you may end up investing too much in the wrong areas.  Working with a real estate agent will help you better allocate your staging budget toward the things that matter most. 


Even if you do not hire a real estate agent, you may have to hire an attorney to help with paperwork.  Buying and selling a home can require a vast amount of paperwork and depending on the age and location of the home, it can require additional addendums regarding lead-based paint or the presence of carbon monoxide detectors.  Forgoing a real estate agent at this stage, could mean future liability later. 


Home sellers who choose not to partner with a real estate agent typically do so because they are trying to save money.  However, the cost of not working with a real estate agent can be far greater.