Paying a 5% – 7% commission to a realtor may seem like a huge and unnecessary amount, however, sellers considering listing their property for sale by owner (FSBO), have to consider the various positive and negatives regarding selling their home themselves. The most basic things that must be kept in mind, is the focus needs to be on the appraised value of the house, not the tax assessment, or what the seller feels they should get out of the sale, and finally not what they paid for it. In today’s real estate market, that last number is a factor that is the most irrelevant.
Advantages: Sellers opting for the FSBO option are not obligated to pay a commission fee, as they are not working with a realtor. Furthermore, in listing a property by themselves, the homeowner gains a higher level of control with the pricing, appointment times and pointing out the best features of the home, and buyer negotiations. Moreover, there are various networks and venues available to sellers. For instance, a seller could put a sign on their lawn with attractive flyers, or add a listing to Craigslist and their local papers, and finally listing the property on websites like, ForSaleByOwner.com, HomesByOwner.com, Zillow.com, Trulia.com and Owners.com.
Disadvantages: The biggest risk a seller takes listing the property by themselves is underselling their house. Statistically, the average FSBO home sells for around 15% less than homes sold via a realtor. Another advantage of having a realtor is access to the multiple listing system (MLS). The MLS system is available only to realtors, and is one of the biggest online tools used in selling real estate. Additionally preparing the legal forms, disclosures, inspections, etc., is the responsibility of the seller, and if they are unfamiliar with any of the guidelines or requirements, they will take a substantial financial risk and legal liability.