What Is FSBO? The Risks and Benefits of “For Sale by Owner”


Did you know that most homeowners use an agent to help them sell their homes? In 2020, 90% of homes were sold with the assistance of a real estate agent. 

Yet, whether buying or selling a home, you want to get the best deal possible and avoid paying unnecessary fees. That’s why some people opt for FSBO (pronounced fizz-bow). What is FSBO? 

This acronym is short for “for sale by owner” and indicates that the seller is not using an agent or broker. Instead, buyers work directly with the homeowner during the sale process. 

Let’s look at some of the main reasons that FSBO can be an excellent alternative to using an agent or a broker when selling a home and why it can get you a better deal when purchasing a property. 

Benefits of Buying FSBO Homes

One of the best things about buying FSBO homes is eliminating all intermediaries. As a result, you may have more room to negotiate with the homeowners.

For example, many FSBO listings sell at lower prices because the owners don’t have to pay an agent. Thus, they are willing to accept lower offers. 

Plus, no one knows the home better than its owners! Open communication with the sellers will allow you to converse about the neighborhood, the history of the house, and special features you may have overlooked. 

Advantages of FSBO for Sellers

The reason that most people choose to sell house without a realtor is to save money. Realtors charge a commission, which is usually four to six percent of the sale price. 

Rather than pay the commission fee, experienced sellers may choose to sell independently, allowing them to bank more of the profit. 

Challenges of FSBO 

Despite the potential benefits of FSBO in real estate, there are also some drawbacks. 

Homeowners aren’t always friendly and ready to negotiate, which can draw out the sale. They may have an inflated sense of home value due to their lack of experience in the market.

Even worse, they may fail to disclose problems like roof damage or mold. Sometimes, even when inspections uncover these issues, getting FSBO sellers to pay for the repairs or lower the asking price to cover costs is tricky. 

On the other hand, sellers may have trouble finding buyers willing to pay their asking price. This can be disappointing, especially when they are stuck paying for the MLS listing and an attorney to draw up the contract.

Plus, they’re likely to find selling their home much more stressful without someone to assist them through every step.  

What is FSBO? Now You Know! 

After reading this post, you know the answer to the question “what is FSBO?”. You also understand the benefits of buying or selling a home this way and the potential risks. 

If you aren’t comfortable with FSBO, talk to a local real estate agent who can navigate you through the home buying or selling process. And, if you would like to learn more great real estate tips, browse more of our content!