Loading the player...

WHAT IS 'For Sale By Owner - FSBO'

For sale by owner or FSBO is a term that refers to a specific method of selling property. In this method, the owner sells the property without the use of an agent or a broker.

BREAKING DOWN 'For Sale By Owner - FSBO'

For sale by owner or FSBO is when an owner of a piece of property chooses to sell the property on their own without hiring an agent or a broker to facilitate the sale. A seller may choose to sell on their own for various reasons, but most often a seller chooses to forgo the services of an agent or a broker because they want to avoid paying the commission for the transaction, which can be quite high.  

We most commonly see for sale by owner transactions on the real estate market. Though it may be a daunting task, it is possible to sell one’s home on one’s own. If one wants to keep that commission price and chooses to sell on their own, there are important steps one must take. First, an individual needs to determine the correct asking price, among the most important pieces of information necessary for a seller to get started on this process. For example, Multiple Listing Service can help an individual determine a sale price, and also has information on how to markets one’s home and how to deal with the legal paperwork and contracts for a flat fee.

Why choose to sell your own home?

When an individual homeowner chooses to sell a house, traditionally they hire a real estate agent or broker to handle the sale. Going through an agent or broker can save a homeowner a lot of time; however, commissions can eat heavily into the seller's profits, often around 6 percent of the sale price. For example, if you sell a home for $500,000, the buyer's and seller's agents would receive $30,000 of that sale. If you choose to handle the sale yourself, you would get to keep the whole $500,000.  That amount of savings can be tempting, though it is important to remember that when a seller does not use a real estate agent, the seller assumes all the responsibilities of completing the transaction, which can be a daunting task for those unfamiliar with the home buying and selling process. Depending on the experience of the seller, avoiding the commission can be a wise financial decision. Those who have little knowledge about real estate transactions, however, can find the situation stressful and may be better off using a qualified real estate agent.

  1. Real Estate Agent

    A real estate agent is a licensed professional who represents ...
  2. Each Way

    Each way describes a transaction in which both buyer and seller ...
  3. Settlement Agent

    A settlement agent coordinates all paperwork and conditions required ...
  4. Owner Financing

    Owner financing is when a property seller finances the purchase ...
  5. Brokerage General Agent

    A brokerage general agent is an independent firm or contractor ...
  6. Open House

    An open house is a scheduled period of time in which a house ...
Related Articles
  1. Investing

    8 reasons to sell your home with an agent

    The standard real estate agent cost you 6% of the total house sales, learn what value do they bring you. See if it is worth to hire a sales agent in a housing sales.
  2. Investing

    Understanding Real Estate Commissions: Who Pays?

    When you set out to buy or sell a house, one factor worth considering is the real estate agent's fees.
  3. Investing

    What Real Estate Agents Don't Want You To Know

    While they can be instrumental in helping you buy or sell a home, real estate agents may ulterior motives.
  4. Investing

    How to Choose the Right Real Estate Broker

    Buying or selling a home can be the major financial transaction of your life. Here's how to choose the right real estate broker or agent.
  5. Investing

    How Real Estate Agent and Broker Fees Work

    Are you buying or selling a home? Here's what you need to know about real estate agent and broker fees.
  6. Investing

    Why You Don't Need A Real Estate Agent

    While there are times when a real estate agent earns the commission, there are other times when you can do it yourself.
  7. Investing

    How To Find The Best Real Estate Agent

    Most people don't have the time, expertise or motivation to go it alone and finding a good real estate agent becomes essential to enjoying a smooth real estate transaction.
  8. Investing

    Closing A Real Estate Deal In A Down Market

    We provide top tips on how to help sell your home in a rough market.
  9. Investing

    A Broker's Open House Can Help You Sell Your Home

    This special type of open house can provide targeted marketing and yield expert advice.
  1. How do real estate agents get listings?

    Learn about how real estate agents get listings in top real estate markets, as well as in smaller areas, through utilizing ... Read Answer >>
  2. Do real estate agents work on weekends?

    Learn how working weekends and evenings is one way real estate agents increase their chances of making a sale to a potential ... Read Answer >>
  3. Why do real estate agents fail?

    Becoming a successful real estate agent requires a mindset that is built for success and strong, consistent action that buttresses ... Read Answer >>
Trading Center