For Sale By Owner: How to Sell Your Own Home

Selling your own home or "for sale by owner" can save you money on the agent commission, but it takes a lot of work.
Linda BellJun 9, 2021

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Selling your own home can be a difficult and stressful process.

With the "for sale by owner" or FSBO option, the homeowner manages the entire selling process from beginning to end, without the help of an agent. The challenging nature of FSBO may be the reason only 8% of sellers went that route in 2020, according to a report from the National Association of Realtors, or NAR.

While complicated, one reason some people choose to list their own home is to avoid the biggest closing cost for a seller: the listing agent’s commission. Companies that help people sell their homes without an agent say doing so can save thousands.

It's easy to start imagining the savings, but there are some things to know before putting up that "for sale by owner" sign on your front lawn.

How does 'for sale by owner' work?

Without a listing agent, you will be responsible for managing the entire home selling process, including setting the price and marketing the home.

But don’t expect to pocket the listing agent’s entire commission, which can be up to 6% of a home’s selling price. The commission is typically split with the buyer’s agent, so you may still have to pay around 3% if the buyer chooses to use one.

With some for sale by owner websites, such as houzeo.com and forsalebyowner.com, you can decide how much responsibility you want to take on. You can get assistance with a myriad of services like agent showings or professional photography, but it will cost you.

How to sell your own home

It takes a specific skill set to sell a house without an agent.

You need to be a strong negotiator to get a fair price for your house and hammer out details such as closing costs or presale repairs.

You’ll need some marketing chops. To get your property in front of potential buyers, you’ll need to arrange open houses, advertise online and more. 3D home tours can let buyers view your home without having to let them in the front door, but do you know how to create one?

You'll need to navigate the legal complexities of selling a house, such as writing purchase contracts, setting up escrow accounts, and evaluating buyer contingencies and disclosures.

Make sure the price is right

Setting the price is one of the most important decisions you’ll make when selling your own house. Price your home too high and it might stagnate without a buyer. Price your home too low and you might lose potential profit.

Nerdy tip: While for sale by owner houses sold faster than agent-assisted homes in 2020, usually because they were purchased by someone the seller knew, FSBO homes saw significantly lower median sale prices than agent-assisted homes, according to the NAR.

If you can, go to open houses in the month leading up to listing your home for sale, recommends Eric Tyson, a personal finance author and economist. Keep track of which homes have sold and at what price. Using this information about comparable listings in your area, you can home in on the right asking price.

Likewise, a local listing agent can provide you with a list of recently sold properties similar to your own at little or no cost, without you having to hire them. This is often called a “comparative analysis.”

Getting an appraisal to estimate your home’s value can help you set a fair market price, but may cost several hundred dollars. You can also use the Federal Housing Finance Agency’s house price index calculator or an online home value estimator.

It takes more than a yard sign

Online exposure is key to getting your home in front of as many potential buyers as possible. Real estate pros use the Multiple Listing Service, or MLS, a comprehensive database of homes for sale.

If you’re willing to pay a flat fee, you can use a third-party website to have a broker list your for sale by owner property on the MLS for you, but that’s where their help would end. You would have to pay the broker if you needed them to help you with other tasks, such as negotiating an offer, says Michael Malkasian, president of FSBO.com.

Other options include listing your home on public websites like Zillow.

Showcase your home in online listings by hiring a professional photographer or videographer. Consider repairs and minor upgrades, as well as home staging, to maximize appeal.

In addition to a digital listing, add "for sale" signs around the neighborhood directing people to your property. You can also promote your house in your local newspaper and on social media.

Hire an attorney

In some states, a real estate attorney is required to oversee the closing of a home sale and to prepare certain documents, whether an agent is involved or not.

Even if an attorney isn’t required, it may be beneficial to hire one when selling your own home. An attorney can help you prepare the necessary paperwork, such as legally mandated disclosure documents. If there are questions about the home’s title or boundary disputes, a lawyer can also help you resolve those issues.

Should you sell your own home?

Selling your own home is like taking on a part-time job. There’s no denying the commitment of time and energy you’ll have to make:

  • Can you drop everything and show the house on short notice?

  • Are you ready to dedicate your weekends to open houses? And nights to last-minute showings?

  • Can you separate your emotions from the process and accept feedback on your home?

  • Are you prepared to confirm if buyers are preapproved for a mortgage before they walk in the door?

Selling your home without an agent is definitely doable. It’s a matter of determining how much time, talent and money you’re willing to spend on the task.

Frequently asked questions

Start with a plan for how you'll manage the entire home selling process. You will be responsible for marketing, showing, staging and setting the price of your home, as well as negotiating with and vetting buyers. Using for sale by owner websites, you can pay for professional help with some of the responsibilities.

It depends on what’s most important to you when selling your home. Some people choose for sale by owner to save money on the listing agent commission and have control over the entire home selling process. However, selling a home without a listing agent can be complicated and stressful, and the savings may not be worth it for some people.

When selling your own home, you'll avoid paying the full listing agent’s commission, but you'll still have to pay the same closing costs any seller would, including title insurance and recording fees, and a commission to the buyer’s agent, if one is involved.  Closing costs for a seller are usually 6% to 10% of the home’s sales price.

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.