Is FSBO, or “for sale by owner,” worth it? The short answer is, it depends on your experience, the current housing market, and how much time you have to dedicate to the process. The main advantage of FSBO is the potential to save the listing agent’s commission.
The key trade-off is whether those savings are enough to offset the extra work, potential legal risks, and the possibility of selling your home for less than an agent could have achieved. In this Redfin real estate article, we will explain if FSBO is worth it (and when it is not) to help you make the best decision as you prepare to sell your home in Kansas City or Salt Lake City.
What does selling FSBO truly save you?
To determine is FSBO worth it, you need to understand the financial savings. The primary motivation for a for-sale-by-owner transaction is financial. By choosing not to hire a listing agent, you avoid paying their commission, which typically ranges from 5-6% of the sale price.
For example, on a $500,000 home, this could mean saving $25,000 to $30,000.
The financial picture often includes these costs, regardless of FSBO or agent:
- Buyer’s agent commission (typically 2.5% to 3%)
- Closing costs (e.g., transfer taxes, title insurance)
- Marketing and staging expenses
The cost of going it alone
While you save on the listing commission, other costs and risks come with managing the entire sale yourself. For the best chance of a successful sale, you must be prepared to handle these key areas:
- Pricing: FSBO homes are often priced incorrectly. An agent uses comparable sales data (comps) and market expertise to set a strategic price. Underpricing means leaving money on the table, and overpricing leads to long listing times.
- Negotiation: You will handle all negotiations with the buyer’s agent or the buyer directly. This includes the initial offer, repairs, and credits after the inspection. Professional negotiators often secure a better final price and terms.
- Marketing: You are responsible for professional photos, crafting compelling listing descriptions, and getting the listing onto major real estate websites, including the Multiple Listing Service (MLS).
- Legal paperwork: You must prepare and understand all disclosure forms, purchase agreements, and closing documents, which vary by state and local law. Errors here can lead to costly legal trouble later. When considering is FSBO worth it, remember that the risk of legal trouble is an important factor to consider.
When is FSBO a good option?
FSBO can be a profitable and lower-stress option under specific conditions.
- You are selling to someone you know: If you have already agreed to sell your house to a family member, friend, or neighbor, the listing process is largely bypassed, making FSBO a simple way to handle the transaction’s closing logistics.
- You have real estate experience: If you are a licensed agent, an investor, or have successfully managed multiple real estate transactions, you already possess the knowledge to handle the complex parts of the sale.
- It is a strong seller’s market: In a highly competitive market where homes sell quickly with multiple offers, an agent’s marketing and negotiating skills may be less critical. However, even in these markets, an agent can often drive the final price higher.
When is hiring an agent worth the commission?
The commission is the cost of professional expertise, marketing reach, and risk mitigation. For most people, hiring a trusted real estate professional is worth the expense.
You should consider hiring an agent if:
- It is your first time selling a home. The process can be overwhelming, and an agent’s guidance is invaluable.
- You need the highest possible sale price. Agents’ pricing and negotiation strategies are designed to maximize your net profit.
- Your home has complexities. Properties with structural issues, zoning questions, or unique features benefit from an agent who knows how to position them correctly.
- You value your time. An agent handles all showings, calls, administrative tasks, and troubleshooting, allowing you to focus on your move.
Is FSBO worth it?
The final answer is up to you. While the opportunity to save the agent’s commission is a powerful incentive, this must be weighed against the potential for a lower sale price, the time investment, and the increased risk of legal errors.
For most first-time or average sellers, the expertise of a trusted agent often pays for itself by securing a higher final sale price and providing essential professional protection. The decision to go FSBO should be a calculated choice based on your personal experience and a well-thought-out assessment of the current real estate market and personal confidence.
Frequently asked questions:
What percentage of FSBO homes sell?
In 2024, FSBO homes accounted for 6% of home sales. “The typical FSBO home sold for $380,000 compared to $435,000 for agent-assisted home sales.” While this figure changes with the market, data generally shows that a significant portion of FSBO listings either fail to sell or the owner gives up and hires an agent. You must be prepared for the possibility that the process will take longer than expected.
Do I still need to pay the buyer’s agent commission with FSBO?
Yes, it is recommended. Offering a commission to the buyer’s agent incentivizes them to show your property to their clients. Buyers who use an agent rarely pay that agent’s commission directly, so refusing to pay it dramatically limits the number of buyers who will see your home.
What are the biggest legal risks with FSBO?
The biggest legal risks involve property disclosures and the sales contract. Laws vary significantly by state and local jurisdiction. If you miss a required disclosure or if there is an error in the purchase agreement, you could face legal action or financial penalties even after the sale is complete. An agent provides a layer of protection and familiarity with the proper paperwork.