Is FSBO, or “for sale by owner,” worth it? Simply put, it depends on your experience, the current housing market, and how much time you have to commit to the process. The main benefit of FSBO is the potential to save on listing agent fees.
The key trade-off is whether the savings are enough to offset the extra work, potential legal risks, and the possibility of selling your home for a lower price than your agent could achieve. In this Redfin real estate article, we’ll explain if a FSBO is worth it (and when it’s not) so you can make the best decision as you prepare to sell your Kansas City or Salt Lake City home.
What does selling FSBO really save you?
To determine if FSBO is worth it, you need to understand the financial savings. The primary motivation for sale-by-owner transactions is financial. If you choose not to hire a listing agent, you will avoid having to pay commissions, which are typically 5-6% of the sales price.
For example, on a $500,000 home, you could save between $25,000 and $30,000.
Your financial picture, whether FSBO or agent, often includes the following costs:
Buyer’s agent commission (typically 2.5% to 3%) Closing costs (e.g. transfer taxes, title insurance) Marketing and staging costs
The cost of doing it alone
You may save on listing fees, but managing the entire sale yourself introduces other costs and risks. To give your sales the best chance of success, you should be prepared to address the following key areas:
Pricing: FSBO homes are often mispriced. Agents use comparable sales data (comps) and market expertise to set strategic prices. Setting a low price means parting with funds, while setting a high price leads to a longer listing period. Negotiations: Handle all negotiations directly with the buyer’s agent or buyer. This includes the initial offer, repairs, and post-inspection credit. Professional negotiators often secure better final prices and terms. Marketing: Responsible for professional photography, creating compelling property descriptions, and listing properties on major real estate websites, including the Multiple Listing Service (MLS). Legal Documentation: You will need to prepare and understand all disclosure forms, purchase agreements, and closing documents, which vary by state and local laws. Errors here can lead to costly legal trouble later. When considering whether FSBO is 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 low-stress option under certain conditions.
If you’re selling to someone you know: If you’ve already agreed to sell your home to a family member, friend, or neighbor, FSBO can be an easy way to handle the closing logistics of your transaction because it largely skips the listing process. If you have real estate experience: If you’re a licensed agent, an investor, or have successfully managed multiple real estate transactions, you already have the knowledge to handle the complex parts of selling. It’s a strong seller’s market. In a competitive market where homes sell quickly with multiple offers, an agent’s marketing and negotiation skills are less important. However, even in these markets, agents often drive the final price higher.
When is it worth paying a commission to hire an agent?
Fees are the cost of 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:
This is my first time selling a house. This process can be overwhelming, and your agent’s guidance is invaluable. We need the highest selling price possible. Agent pricing and negotiation strategies are designed to maximize net profits. Your family has complicated circumstances. Properties with structural issues, zoning issues, or unique features benefit from an agent who knows how to properly position the property. You value your time. Our agents handle all showings, phone calls, administrative tasks, and troubleshooting so you can focus on your move.
Is FSBO worth it?
The final answer is up to you. The opportunity to save on agent fees is a strong incentive, but it must be weighed against the potential for lower selling prices, time investment, and increased risk of legal mistakes.
For most first-time or average sellers, the expertise of a trusted agent often pays off 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 thoughtful assessment of the current real estate market and your personal confidence.
FAQ:
What percentage of FSBO homes are sold?
In 2024, FSBO homes accounted for 6% of home sales. “A typical FSBO home sold for $380,000, while agent-assisted home sales sold for $435,000.” While this number varies by market, the data generally shows that a significant portion of FSBO listings either don’t sell or the owner gives up and hires an agent. You should be prepared that the process may take longer than expected.
Do I have to pay a buyer’s agent fee with a FSBO?
Yes, it is recommended. By offering a commission to your buyer’s agent, you incentivize them to refer your property to their clients. Buyers who use an agent rarely pay their agent’s commission directly, so refusing to pay the agent’s commission will greatly limit the number of buyers who will look at your home.
What are the biggest legal risks regarding FSBO?
The biggest legal risks include asset disclosure and purchase and sale agreements. Laws vary widely by state and locality. Failure to make required disclosures or errors in the purchase and sale agreement may result in legal action and financial penalties even after the sale has been completed. The agent will provide a layer of protection and will be familiar with the proper paperwork.
