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What is FSBO? Know This Beforehand

by | Aug 26, 2020 | Buying, Real Estate Glossary, Selling

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So perhaps you’ve been thinking about selling your house, but you don’t want to pay thousands in commissions. Or perhaps, you’re searching for a new home online and keep running across the term “FSBO.” Here is what you need to know. 

What does FSBO stand for?

FSBO, pronounced “PHIZ-boh,” stands for “For Sale By Owner.” This is a listing when the owner chooses to sell the home themselves without using a real estate agent or broker for assistance. And this also means that, since you’re not using an agent, the listing will not be present in the local multiple listing service (MLS).

Why do home sellers try FSBO? 

When a home owner sells their home using a real estate agent, they typically pay about 6% of the home sale price in real estate commissions. Homeowners that try FSBO believe they can sell their home by themselves and save a ton of money.  

Under FSBO, the homeowner takes responsibility for all aspects of the real estate transaction. This includes home prep and staging, creating the listing, marketing, photography, fielding offers, negotiating the final sales price, and producing all required paperwork and contracts.

Do you need a real estate agent to buy a FSBO home? 

You don’t need a real estate agent to buy a FSBO home. But it’s always helpful to have your own real estate representation, someone to guide you through the real estate transaction process, whether it’s a traditional purchase or a FSBO. An agent will confirm, for instance, whether this house’s price is reasonable, help you put together a solid offer for the owner, and negotiate the inspection and other potential issues that might arise on the way toward closing.

But that can also create a tricky situation. In a traditional real estate transaction, the seller will pay for both the seller’s agent and the buyer’s agent. If you’re a home buyer with your own agent working with a FSBO, the buyer’s agent will still expect to be paid for their work on your behalf. However, since the home sellers are not using a seller’s agent, then they may not be willing to pay for your buyer’s agent. 

There are a couple of ways to get around this conundrum:

Request the home seller cover the costs

Although the seller has chosen to save money by not using an agent on their own end, they may realize that having a buyer’s agent may help bring a smooth transaction and because of this, they may still cover the buy side of the commission. 

Make the buyer’s agent fee part of your offer

If the seller doesn’t want to pay the buyer’s agent commission, work with your agent to build an offer that includes that fee and will pay the buyer’s agent at closing. 

What does the typical FSBO process look like for the seller?

  • The seller needs to figure out the asking price on their own by researching property values and house prices in their neighborhood for houses that have similar features, such as the number of bedrooms and bathrooms, finished basement, square footage, and so on.
  • The next step would include their own advertising, listings online – social media and otherwise, brochures, and flyers to distribute in strategic locations.
  • The seller must schedule all of their own showings and open houses.
  • Once an offer has been made and accepted, the seller needs to negotiate the price with the buyer and write up the conditions of the sale.
  • The seller must still work with a title and escrow company to prepare their legal documents, including the bill of sale, showing the details of the transaction in entirety.
  • Once the seller and buyer sign the contracts, the closing of the sale can be completed and the seller signs over the deed of the home to the buyer.

Advantages/Disadvantages of FSBO homes

There are good things but also some risks to selling your home as “For Sale By Owner.”  


Cost – Agents and brokers cost a lot of money. Typically, a 6% commission is paid by the seller. If the seller owns a $300,000 home, that means you will pay out roughly $18,000 to both the seller’s agent and the buyer’s agent.  

Flexibility – Traditional real estate contracts can be restrictive. Once signed, it can be difficult for you to take your home off the market, if you want. Additionally, listing contracts usually include clauses that ensure listing agents collect payment even if you somehow find the buyer yourself.

Representation – While both you and your agent might want a home to sell for the most money possible, the agent may consider their own concerns regarding speed of transaction or holding out for a higher bidder that might not be the right bidder for you. With a FSBO sale, there are no such conflicts of interest for you. 


Cost – On the flip-side for cost, while you can save money ultimately, all costs such as marketing, lawyers for the legal papers, and listing costs are paid by you, which can lead to higher initial costs.

Perception – Buyers may worry about your commitment to sell, because you can take your house off the market at any time. And buyer’s agents may not want to show your home to their buyer in order to discourage other sellers from pursuing FSBO. 

Time – You’ll need to spend much more time preparing your own paperwork, doing all the legwork of marketing their house, and representing yourself in any sale negotiations. 

MLS – Not being listed in the MLS might be the biggest disadvantage of all. When an agent puts a seller’s home in the MLS, it syndicates that listing to over 500 different websites. All the major real estate websites focus on MLS listings, and buyers frequently search those website listings to find places they want to see. Buyer’s agents also use those listings to find good places to show their clients. So if your home is not in the MLS, you’re closed out of a pretty big loop. 

Happy medium

When you sell your house with Trelora, you get an alternative to FSBO that provides all the benefits you normally get when using a traditional agent, such as professional photography, MLS listing, expert guidance, and more. You’ll also get best-in-class customer service. A team of expert agents that close hundreds of deals per year. And a proprietary technology platform that puts you in the driver’s seat. 

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The information contained in this blog is for general information purposes only, and while believed to be accurate, Trelora assumes no legal responsibility for accuracy. Information provided within should not relied upon as legal advice. Please consult with your local advisors for independent information regarding availability and applicability in your market.