• Selling a house by owner may help you save on real estate commissions, but the increased time, hassle, and risk might not be worth the savings for all home sellers.
  • Selling a house by owner involves listing, marketing, and showing the property yourself, as well as reviewing and negotiating offers, and navigating the contract period with the applicable forms, agreements, and disclosures.
  • Because of the complexity and work involved in real estate transactions, selling by owner may be best left to those with real estate experience or sales to trusted friends or family.

Selling your home without a real estate agent could potentially save you money on the real estate agent commission, but there are risks to be considered before going without professional representation. 

In this article, you’ll learn how to sell a house by owner, and explore the pros and cons so you can make an informed decision regarding whether or not to hire a real estate agent.

How To Sell a House by Owner

Listing your home for sale by owner, which is commonly referred to as FSBO (pronounced Fizzbo), is an enticing option for home sellers who want to save on commission fees while having more control over important considerations for selling your home, like setting the listing price, holding open house showings, and negotiating the sale of your home. While the fee for hiring a listing agent (a real estate professional who represents the seller in the transaction) is always negotiable, most listing agents charge 2-3% of the sales price.[1] For reference, on a $500,000 home, this amounts to a $10,000-$15,000 fee.  

If you choose to list your home FSBO, you’ll need to handle the following tasks yourself or with the assistance of an attorney.

1. Preparing the Property for Sale

As the property owner, you would be preparing the property for sale, whether or not you have an agent representing you. The only difference is that FSBO sellers don’t have an industry insider providing specific guidance on what today’s buyers are looking for.  

In general, this step includes:

  • Deep cleaning the property top to bottom
  • De-cluttering, including storage spaces, which buyers want to see
  • De-personalizing by removing family photos and memorabilia so buyers can imagine the home as theirs
  • Refreshing the landscaping as needed
  • Touching up paint or repainting as needed
  • Replacing dated fixtures with more modern alternatives
  • Making any minor repairs to show that the house has been well-maintained

2. Setting a Listing Price

Establishing the right listing price is critical. Pricing too high can deter prospective buyers from inquiring, or even prevent your listing from appearing in online search results when buyers filter by price. For example, if your home is worth around $485,000, but you set the price at $510,000 to leave room for negotiations, your listing will not appear for buyers who set a maximum price of $500,000 in their online searches. 

Pricing too low may be done strategically in some markets to start a bidding war, but this could backfire if there is not enough buyer interest. 

In most cases, setting a listing price at the fair market value (FMV) is a sound pricing strategy. Learn more about FMV and how to determine the amount. 

3. Market the Property to Qualified Buyers

Unless you already have a qualified buyer in place, you’ll need to market the property to find one. 

This multi-step process includes:

  • Taking high-quality listing photos
  • Writing a compelling description of the home
  • Placing a yard sign on the property
  • Hosting an open house
  • Notifying your neighbors so they can tell their friends who may be looking to move to the neighborhood
  • Creating online and/or print ads
  • Publishing the listing online. In some markets, the local MLS (multiple listing service) allows FSBOs to publish their listing for a fee.[2] This allows your home to be included in the database real estate agents use to find homes for their buyers and automatically publishes the listing on popular home-search websites like Zillow and Redfin. Alternatively, you can skip the MLS and publish directly to platforms like Zillow, Realtor.com, and FSBO.com, although each platform may charge individual listing fees.[2]

Importantly, seller's agents typically pay for most, if not all, of these costs as part of their listing services. So if you hire an agent, you might not have to pay for any of this out of pocket.

4. Respond to Inquiries and Schedule Showings

With the right preparation, pricing, and promotion, buyers and buyer’s agents may start contacting you for more information or to schedule a tour of the home. Prompt, professional replies and flexibility in accommodating last-minute tour requests may help you secure more showings, getting you one step closer to selling. 

5. Host Showings

As you conduct home tours, remember to:

  • Put safety first. If possible, have someone else present when inviting prospects into your home.
  • Appeal to the senses. Make sure the home is at a comfortable temperature, smells nice, and is properly lit. 
  • Secure pets. Some people are afraid of animals, and some people are allergic, so it’s best to keep pets away from prospects just in case. 
  • Emphasize the benefits. Rather than just pointing out the features, highlight how the features benefit the buyer. For example, a fireplace creates a cozy environment while saving on heating costs. 
  • Give the prospects time alone. Step away so the buyers can explore the home and discuss it amongst themselves openly without fear of offending you. 

6. Review Purchase Offers and Negotiate Terms

When you receive a purchase offer, pay close attention to:

  • The purchase price. This is the amount the buyer is willing to pay.
  • The financing. All-cash offers may be preferred since you don’t need to worry about the buyer qualifying for a mortgage loan, but with most buyers requiring financing to purchase a home, these offers should not be ignored.  
  • The proposed closing date. Make sure the date works with your schedule, particularly if you’re planning on buying a new house at the same time. 
  • Contingencies. Contingencies are stipulations that must be met before the deal can proceed. For example, purchase offers commonly include an inspection contingency, which allows them to cancel the deal if they are not satisfied with the home inspection.   
  • Concession requests. Depending on local market conditions, buyers may ask for financial concessions in which the seller agrees to pay for some of the buyer’s closing costs or other expenses.  

If the offer is agreeable, you may accept it as-is, creating a binding purchase agreement. If there are terms you wish to change, you may draft a counteroffer for the buyer’s consideration. If you feel the buyer is not serious about coming to a mutually beneficial deal, you may decline the offer.  

7. Open Escrow 

Escrow is when a neutral third party temporarily holds funds before distributing them according to a contract. In this case, earnest money escrow needs to be opened with an escrow officer, attorney, real estate brokerage, or title Company to hold the buyer’s earnest money deposit while they complete their due diligence and you work toward closing the deal.[3] 

8. Order a Title Search 

A title search confirms that the owner of a property has the clear right to sell. Any potential issues with the title, including liens against the property for unpaid debts or ownership claims from other parties (such as former spouses), typically must be addressed before the property can transfer to the buyer.[4] 

You can order a title search from a title company. These companies may also offer additional services to assist with the closing process. 

9. Renegotiate After the Inspection and Appraisal (If Needed)

Most purchase agreements contain inspection and appraisal contingencies that allow the buyer to renegotiate or terminate the deal if the home inspection or home appraisal is not satisfactory. For example, if substantial repairs are needed, the buyer may ask for the repairs to be made, a financial concession so they may make the repairs after closing, or a reduction in the purchase price. Similarly, if the appraised value is less than the purchase price, the buyer may ask for a reduction in the price to reflect the fair market value as determined by the appraisal.  

10. Complete the Necessary Paperwork and Prepare for Closing

As an FSBO seller, you're legally responsible for providing all required documentation to the buyer. Requirements may vary by state, county, and city, but often include:[5]

  • Property disclosure forms: States known defects, safety issues, or material facts that affect the home’s value or desirability.
  • Lead-based paint disclosure: States that lead-based paint may have been present. This is federally required for homes built before 1978.
  • Purchase agreement with any addenda: The legally binding contract outlining the terms of the sale, plus additions to the contract, such as contingencies, escalation clauses, or inspection waivers (as applicable).
  • Final closing documents: These are often provided by the title company or escrow agent, but you’ll need to review everything for accuracy before signing and making sure the buyer gets a copy.

You’ll also need to coordinate the final steps to officially transfer ownership. This may include:

  • Choosing a closing method. You and the buyer may opt for an in-person closing in which everyone is physically present or a virtual closing, which can be completed remotely in many states. 
  • Scheduling a final walkthrough. This gives the buyer a chance to confirm that the property is in the expected condition and that any agreed-upon repairs have been completed. 
  • Signing the final documents and collecting any proceeds from the sale. Be sure to involve the party handling escrow so they can notarize signatures on the deed, bill of sale, and settlement statement as needed. They’ll also collect funds from the buyer (and/or their lender as appropriate) and disburse funds to the appropriate parties before possession officially transfers. This can be surprisingly complex as closing costs need to be collected and distributed from both parties. As a seller, you can expect to pay closing costs relating to title insurance, document preparation, and escrow services, among other fees.  
  • Handing over the keys. With all documents signed and all funds distributed in accordance with the instructions in the purchase agreement, you can hand over the keys to officially close the sale. Don’t forget garage door openers, mailbox keys, or outbuilding keys, as applicable. 

Tasks to Complete Immediately After Closing

For a smooth transition into your new chapter, complete these tasks soon after closing:

  1. Confirm that the deed was recorded. The title company or closing attorney will typically record the deed with the appropriate local government office, but it’s worth following up to request a copy of the recorded deed. This document proves that you no longer own the property or carry any responsibility for it.
  2. Confirm that the local tax assessor has been notified of the sale. The title company or closing attorney should have notified the assessor’s office of the change in ownership, but it’s worth following up to make sure future tax bills are provided to the new owner.   
  3. Make sure homeowners insurance and utilities have been canceled and any mortgage you held has been paid off. You may have terminated homeowners insurance and utilities as part of your moving checklist, but it’s still a good idea to make sure the cancellations were processed to avoid further charges. If you had a mortgage on the property at the time of the sale, you may want to contact your former lender to make sure they received the funds to pay off the mortgage.

Do You Need a Real Estate Attorney When Selling by Owner?

In some states, attorneys are legally required to facilitate real estate transactions.[2] 

Even in states where hiring an attorney is not required, it may be worthwhile for FSBO sellers as the attorney can:

  • Draft or review your purchase agreement
  • Ensure your disclosure forms meet state laws
  • Help resolve title issues
  • Handle negotiations or contingencies
  • Make sure your closing paperwork is accurate and complete

It’s worth noting that these tasks are typically handled by a real estate agent when buyers choose to hire one. 

Pros and Cons of Selling a House by Owner

The potential benefits of selling FSBO include:

  • Saving on agent commission costs
  • Full control over marketing and pricing strategy 
  • Direct communication with buyers
  • The possible disadvantages of selling FSBO include:
  • Limited market exposure, as you may miss out on MLS access and agent networks
  • Risk of overpricing or undervaluing
  • Time required to handle everything yourself
  • Emotional involvement may make it harder to be objective in negotiations
  • Risk of failing to comply with regulatory requirements you’re unaware of
  • Some FSBO sellers are unsuccessful and end up hiring an agent to sell the property after all

Is FSBO the Right Choice for You?

Going FSBO may make sense for you if:

  • You’re selling to a friend, family member, colleague, or other known party whom you trust
  • You have experience in real estate marketing, contracts, and negotiation.
  • You have the time and patience to handle all buyer inquiries, showings, and offers yourself. 

If you are not comfortable navigating the process alone, consider hiring a real estate agent to take over many of the tasks and legal responsibilities of the home sale.