Selling a home is a big job, but some homeowners like the idea of doing it on their own. Instead of using a listing agent, they put their home on the market for sale by owner, or FSBO. Only 6.2% of home sales are for sale by owner, according to Trulia data, so it’s not a super common way to sell a home—but if you’re up for it, here’s what you need to know.
What is for sale by owner, or FSBO?
A home that is for sale by owner, or FSBO, is one that is being sold by the owner only, without a real estate agent.
Why would a home seller choose to do for sale by owner?
Some homeowners opt for FSBO because they don’t want to pay a listing agent. They may also have sold property before, so they feel like they know the drill.
Not sure if the process is something you can (or want to) handle? While most of the steps to selling a house are the same with for sale by owner, here’s an overview of what’s involved for the seller when you go this route.
What sellers do during a for sale by owner home sale:
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Price your own home.
For sale by owner homes are priced an average of 2% higher than agent-listed homes, according to Trulia research. But that doesn’t mean they get that price—and homes that aren’t accurately priced do tend to stay on the market longer.
Typically, a real estate agent will help you determine how much your house is worth. Some of that calculation comes from a comparative market analysis, which relies on data only licensed real estate agents can access.
If you do want to try to price your home on your own, here’s what you should include in your research:
- Current prices for homes like yours. Search your target city or neighborhood in Trulia, you’ll find a few indications of current local prices, including home estimates for neighboring houses, typical price ranges of homes in your neighborhood, and Price Trends info.
- Comparable home prices over time. You can find market trends on Trulia for a particular city going back five years.
- Figure out local housing supply. In a balanced market—one in which you won’t have to battle over every listing—there’s usually about a six-month housing supply.
- Consider your home improvements. While you probably won’t get 100% return on your investment for renovations, they’ll likely affect how much your house is worth.
For more details on how to do all of the above, check our guide on deciding how much your house is worth.
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Prepare and stage the property.
It will be your job to decide which repairs and upgrades to do to make your home to get it sale-ready. A real estate agent typically offers their expertise on which home improvements are more attractive to buyers and most cost-effective for sellers. You’ll also need to stage your home, photograph it for your listing, and then list your home.
You can hire professional stagers and photographers, but stagers in particular are expensive. A staging consultation can cost between $300 and $600, and a three-month contract can cost up to $7,000 or more.
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Create your listing.
Here’s a big downside to for sale by owner for sellers: only real estate agents can put homes on the Multiple Listing Service, or MLS. When a home is posted to MLS, it is automatically listed on online real estate sites like Trulia, and buyers’ agents routinely present the newest MLS listings to their clients.
It is possible to pay a flat fee to a specialized real estate company to only list your home on MLS, but they offer you no other services. This typically costs a few hundred dollars. Alternately, you can skip MLS and list your for sale by owner home directly on sites like Trulia and Zillow.
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Learn the seller disclosure requirements for your state.
Anyone opting to sell their own home should be well-versed in the disclosure requirements for their state. It’s important to do careful research on what sellers must tell buyers about their homes, including things like structural problems, past flooding issues, and the use of lead paint. Check out our guide on seller disclosures for more details.
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Communicate directly with the buyer or buyer’s agent.
You may not have an agent, but your potential buyer is likely to have one. That means you’ll be communicating directly with either the buyer themselves of their agent throughout the entire process.
While this could go any number of ways, if it’s you communicating with an agent, keep in mind that they are a pro at this and you may feel some emotions about selling your home. Take time to consider every communication before responding, and think through how you’d respond if you had no emotional attachment to the house or the price you’ve set.
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Potentially hire an attorney or other third-party experts.
Some states require attorney representation at closing to protect the interests of both parties. You may also just want an attorney on hand to help you through various stages of the process. Any time you complete a legal document, from a seller’s disclosure to a purchase agreement, it’s smart to have an attorney review it.
Another cost of selling your house is hiring a third party—either an attorney or a title company—to hold onto earnest money placed in escrow.
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Check Zillow Offers to consider a quick, convenient sale.
There’s also another option for homeowners interested in a for sale by owner process that’s simple and easy. Check out Zillow Offers to see if selling right to Zillow through an iBuyer sale might be the right move for you. Zillow will purchase your home directly, which saves you the need to do repairs, host showings, or wonder if you’ll get the price you want in a timely fashion. You can even choose your own closing date to make the timing perfect for you.
You can request a free, no-obligation cash offer from Zillow Offers today. Whether or not this fast, convenient option is the right choice for you, the free offer is a great starting point for starting to understand your market and pricing.
Want to hear more about selling right to Zillow? Check out our complete guide on the iBuyer process next.
