What Does For Sale By Owner (FSBO) Mean?

For sale by owner (FSBO) means selling a home without a real estate agent. Sellers choose this route when they want to avoid realtor fees or when they're in a unique situation, like selling to a cash buyer, listing in a hot market, or already having an interested buyer.

However, FSBO homes typically sell for less — sometimes tens of thousands less — and sellers must handle pricing, marketing, negotiations, and paperwork themselves. Often, the lower sale price outweighs any commission savings.

Buyers may spot deals on FSBO properties but face risks from inexperienced sellers. A buyer’s agent can help protect buyers by handling inspections, contingencies, and paperwork while advocating for their interests.

While FSBO sales can save money in theory, lower sale prices and risks often reduce those benefits for both parties.

For a safer, low-cost option, consider Clever Real Estate. Clever connects sellers with top agents charging just a 1.5% listing fee (half the typical 3%), and eligible buyers can earn cash back after closing. Find top-rated agents near you, and save thousands on commission.

Pros and cons of FSBO for sellers

✅ You save on realtor fees

The main reason for selling by owner is to save on realtor fees. About 81% of sellers who don’t use an agent say saving money is a priority.[1]

In a traditional sale where both the buyer and seller are represented by real estate agents, the total realtor commission amounts to 5–6% of the sale price — with half going to the seller’s agent and the other half to the buyer’s agent.

By selling without a realtor, you could potentially save the amount equivalent to what you’d pay for the listing agent — about 2.5–3% — and even the full 5–6% if the buyer doesn’t have an agent or they pay for their agent out of pocket.

✅ You can test the market or wait for a good offer

Many homeowners choose FSBO not because they're eager to sell, but because they want to get a sense of how much they can get for their house. Simply putting up a "for sale" sign in your front yard can give you a good idea of how much interest your property would generate if you choose to sell in the future.

Plus, by going the FSBO route, you’re under no pressure to sell quickly. You can wait for as long as you like until you get an offer that you’re happy with.

For example, if you’re recently retired, you may be looking to downsize, but you also may have no firm deadline for when you need to move. You can take your time by selling FSBO. This is a common scenario, with the median age for FSBO sellers being 57 years,[2] suggesting that many are at or nearing retirement and not on a tight schedule to sell.

In contrast, if you're represented by a real estate agent, you may feel pressured to sell sooner rather than wait indefinitely to see what buyers are willing to offer. Plus, your agent may be incentivized to get your home sold within the timeline laid out in your listing agreement.

✅ You may already have a potential buyer

If you already have a potential buyer for your property — such as if you’re selling to a family member — then an agent may offer limited value.

Many of the things an agent does — like listing your property, staging, and conducting open houses — are unnecessary when you already have a buyer lined up. In fact, 38% of sellers who chose not to use an agent already had a buyer lined up.[2]

That said, you may still want a real estate agent to ensure you’ve priced the property fairly and that the sales contract doesn’t unduly favor the buyer.

❌ FSBO homes sell for less on average

FSBO homes, on average, sell for less than homes sold with a realtor. Some investors target FSBO homes in order to make lower offers and take advantage of a seller’s lack of representation and possible lack of experience.

If you're negotiating with an experienced buyer or a buyer’s agent, you may be at a disadvantage and feel pressured to sell at a lower price. You may also not know what is fair or standard in a buyer's offer, such as the closing costs they're asking you to cover or the repairs they're requesting.

One study found that FSBO homes sell for $55,000 less than those sold with an agent.[3] So you could actually walk away with a lot less money if you sell FSBO and save on the listing fee than if you let a realtor handle the sale and pay the commission.

❌ Selling a home by owner is a lot of work

Selling a house without a realtor isn’t easy — you have to do everything a realtor typically does, such as showings, staging, photography, marketing, negotiations, and listing the property. And as we pointed out above, you may end up with the same or even less amount of money once the sale closes as you would have if you let a realtor do the work for you.

That work not only eats up a lot of time, but it could also lead to out-of-pocket expenses. For example, a real estate photographer can cost $100–500 or more, depending on location, house size, and extra features, like twilight photography and drone photography.

You may also end up investing in repairs and upgrades that offer a low return on investment. A realtor can usually give you a good idea of how much value specific repairs and upgrades add to your home so that you’re in a better position to decide whether or not they’re worth taking on.

❌ FSBO sales often fail

Many FSBO sellers eventually lose patience with how much work FSBO requires, especially if they don't already have a buyer lined up. The process of finding a buyer can make the selling process much longer.

Plus, FSBO sellers who aren’t selling to a friend or relative are more likely to find the process difficult. Those who already know their buyer tend to report fewer difficulties with tasks like marketing, negotiating, and paperwork compared to those starting from scratch.

❌ You may waste time with unlikely buyers

As a FSBO seller, you may waste your time with buyers who aren’t serious about purchasing or who are unlikely to get approved for a mortgage. A realtor can ask the right questions to gauge how likely a buyer is to close on a deal.

For example, an agent can usually get a sense of how serious buyers are by asking them certain questions, including:

• Do you have a buyer’s agent?
• How long have you been looking for a home?
• Do you have a desired move-in date?
• Do you have questions about repairs, schools, transportation, and so on?

An experienced agent will also be able to intuitively sense a serious buyer from one who is "just looking" by paying attention to the questions the buyer asks. This sort of intuitiveness comes only with years of experience and is something sellers on their own are unlikely to pick up as quickly.

❌ Mistakes usually fall on the seller

Liability usually rests with the seller in a home sale. If you misrepresent the property in any way — either intentionally or not — the consequences usually fall on you.

In some states, for example, you’ll have to disclose all known defects with the property to the buyer. Failure to do so could result in legal troubles later on — and you may be required to pay for the mistakes or fix them.

And misrepresentation is much broader than just having to disclose defects with the house. You could unintentionally misrepresent features of the house and inadvertently inflate its value.

For example, you may think you have real marble countertops, but you may in fact have cultured marble counters — they look almost identical, but real marble can cost twice as much as cultured marble. That seemingly innocent error could lead the buyer to hold you liable for the error and seek compensation for it.

A real estate agent usually has the experience to look for issues like this that many homeowners don’t notice. That experience could save you a lot of trouble and money.

Pros and cons if you’re buying a FSBO home

✅ There is potential for a better deal

Experienced buyers — or buyers represented by a great agent — can find deals when buying FSBO. A FSBO seller may have little to no negotiating experience, or they may be more open to selling at a lower price.

For example, FSBO sellers are already saving anywhere from 2.5–6% on real estate agent commissions. That often gives them more wiggle room to come down in price than they would using an agent.

Plus, some FSBO sellers may be in situations where they're open to selling fast and for less.

Sellers who have negative equity in their home and can't afford a realtor, for example, are more likely to try FSBO to lower their costs. These sellers need to sell quickly to get out of a bad financial situation, so they may be more willing to entertain a lower offer.

FSBO sellers may also be open to suggestions that could save you and them time and money. A FSBO seller with negative equity, for instance, may be especially eager to accept a cash offer. A cash offer can reduce overall closing costs and is generally less complicated to handle, both for the buyer and seller.

✅ Direct communication with the seller could give you an advantage

You can communicate directly with the seller in a FSBO transaction, as opposed to a traditional sale where you communicate via an agent. This direct line of communication has advantages when buying a home for the best price.

For example, the seller may have "insider knowledge" about the property or neighborhood that a realtor may not know. They can let you in on things like how much they pay per month in heating, how long the hot water lasts in the morning, or even the best side of the house to plant a garden.

Direct communication also provides a good opportunity to convince a buyer that you’re the best "fit" for the property. Pulling at a seller’s heartstrings can be the tipping point if you’re competing with other buyers.

Being able to communicate with the seller directly gives you a chance to convey in person why you love the property and what it would mean for you to own it — rather than having to explain it in a letter delivered via a real estate agent.

Similarly, a direct line of communication with the seller reduces the chances of miscommunication that may occur when one or both parties are represented by agents.

» MORE: How to Make a Competitive Offer on a House Without a Realtor

❌ Seller mistakes could prove costly later on

A FSBO seller may not be fully aware of their legal requirements when selling a home, which can create unwanted surprises for you if you’re buying.

For example, a seller — intentionally or not — may fail to disclose a defect with the property, such as an addition that didn’t have the proper permits, a lien on the property, or a structural problem with the foundation.

Even seemingly innocent mistakes — such as mistaking the age of the property or the types of materials used in construction — can have a serious impact on the value of the home. Such errors can cost you time and money to fix, and they may negatively impact the property’s resale value.

A listing agent will know what sellers are obligated to disclose and can help ensure that the paperwork is in order. Without a realtor, sellers may inadvertently make mistakes that end up costing you later on.

❌ Home may not be priced right

A FSBO seller may have trouble pricing their home fairly, which can leave you with a home that you’ve paid too much for if you’re buying. Some FSBO sellers may inflate the price, either intentionally or because they assume the property is worth more than it actually is.

For example, many FSBO sellers price their homes based on the sale prices of other homes in their area. This pricing method can lead to misvaluations if the FSBO seller isn’t taking into account other factors that may affect the price.

So, a seller may see a similar-sized home in their area selling for $500,000 and assume that their house is worth the same — without taking into consideration extra features, such as renovations, age, and upgrades, that could affect property values.

If the home is overvalued, you may have trouble getting a mortgage to cover the asking price. Most mortgage lenders require an appraisal and won’t approve buyers for a mortgage for more than what the home is worth.

❌ Some FSBO sellers aren’t serious about selling

While a FSBO seller may be serious about selling quickly, it’s less of a sure thing than a seller who has already gone through the work of finding an agent.

For example, over half of FSBO sellers who don’t already have a buyer lined up feel no urgency to sell. Some FSBO sellers simply put their houses up for sale to test the market and see what price they could get if they chose to sell.

These types of FSBO sellers may be willing to sell if the price is right, but they’re unlikely to be in a rush to do so and are often less open to negotiating. A seller represented by a listing agent is more likely to be serious about selling sooner.

A listing agent will want to get the house sold faster in order to get paid, and they may have a listing agreement with an expiration date that further motivates them to sell quickly.

FAQ: FSBO meaning

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