Are you tempted to put a “for sale by owner” (FSBO) sign on the front of your lawn and do it all by yourself? Selling your own home can be tempting — after all, a real estate agent’s commission can be pricey, and if you’re a homeowner who is already struggling to keep up with your mortgage, every penny of your home’s sale price counts. But before you take the plunge, you’ll want to know the pros and cons of selling a home by yourself. You’ll also want to know how the FSBO process differs from working with a licensed real estate professional. In this article, we’ll go over the basics and answer some commonly asked questions.
What Are the Advantages to Selling My Own Home?
You can avoid paying real estate agent commissions. A licensed realtor may be able to connect you with potential buyers for your home, but by selling your home on your own, you may save thousands of dollars that you would pay a real estate agent in commissions. That’s money that could go toward student loans, home improvement projects or paying off credit card debt. This potential cost savings is usually a key reason so many homeowners choose to sell their own home.
You control the selling process. When you sell your own home, you get to decide how and when to market your home, when to hold open houses, and who’s invited to tour the property. You’re also responsible for preparing the contract, so there are no surprises or unexpected expenses. Beyond that, you set the selling price, which can be a little more than what you’d expect since you’re not paying commission.
You can take as much time as you like. When you sell your house on your own, you can set your own schedule. That said, you’ll want to be vigilant about scrutinizing potential buyers, especially those who may look good on paper but aren’t able to qualify for a home loan or who have poor credit. (You can see where your own credit stands by viewing two of your free credit scores on our site.) The last thing you want is to take on an unqualified buyer who delays the sale of your home.
What Are the Downsides to Selling My Own Home?
You’re not a real estate expert. Probably the largest disadvantage of selling your own home is that you don’t get the expertise that comes with hiring a realtor. A good realtor, especially one who knows your market inside and out, can price your home depending on your needs — say, you need to sell fast — and what the market will want. They may also know more real estate agents with clients who are in the market for a home just like yours. If you decide to go the FSBO route, you’ll likely want to pay for an independent real estate appraisal or perform a survey of the prices of homes that are comparable to yours (this information is available to the public in county courthouses) so you set an accurate asking price. Buyers want this information at the ready so they can negotiate.
It costs money and time to market your own home. Without a real estate agent doing the legwork, you’ll need to promote your home sale yourself. You’ll need to front the costs for a sale sign, open house signs, materials, and fliers to give potential sellers. You’ll also need to photograph your home (or hire a professional) and list your property on local websites, newspapers and so on. Better clear your evenings and weekends, too: You’ll need to spend that time showing your home to potential buyers. You also will need to handle the scheduling of all these appointments by phone or email.
Paying the buyer’s real estate agent. A buyer who works with a real estate agent may request you to pay a commission. This is another aspect of the home-selling process that a real estate agent would handle.
The FSBO selling process could save you a bundle of money — but it also takes more time and effort to be your home’s salesperson. Whatever you do, make sure you do your research beforehand so you know which option is best. Otherwise you may get overwhelmed and be tempted to give up.
This article has been updated. It was originally published February 12, 2015.