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For Sale by Owner vs. Hiring a Realtor

Spectora 6/10/19 3:24 PM

More and more nowadays when homeowners decide to sell their home, they think “Could I sell my home myself and save the Realtor commission?"

We all want to take home as much cash on our investment as possible. It's easy to forget what exactly you're paying for. There are pros and cons to going at it alone vs. working with a real estate agent, so let’s take a look at what those are to give you perspective on what might be right for you.

FSBO (For Sale by Owner) Advantages

Pro # 1 - You Are in Control

When you are in control, there is no one to run decisions by or get advice on. It allows you to make decisions that might otherwise not be favored by a realtor and any potential conflict of interest. You will not have to explain your choices or jump through their hoops; you’ll sell your home at the pace and price you intend.

Pro # 2 - Your Home Knowledge

One of the best reasons to sell your own home is that you (should) know the home's major systems and structure inside and out. This makes you the best salesperson for the home's highlights. You’ll be able to effectively speak to the home’s upgrades and hidden features and answer questions immediately with little back and forth.

Pro # 3 - You’re Not Paying a Commission

This is probably the biggest and most common reason people go FSBO. When you sell your home with a realtor, you're paying that agent a commission that comes right out of your sale profits. Even if you negotiate that commission price, you’ll still pay between 5-and-7 percent of the sale value. Half of that going to the buyer's agent.

Pro # 4 - Direct, Good Faith Negotiating

Going through intermediaries can sometimes result in folks trying to get every inch they can out of a deal. When you're dealing directly with the people wanting to buy your home, there can be good faith benefits that come from speaking directly to them.


FSBO Disadvantages

Con # 1 You Might Not Be Taken Seriously

You might have a terrific property, but some people won't treat you the same way they would treat a licensed professional. Some homebuyers are afraid of pursuing a for sale by owner home and fear that the same level of due diligence wasn't performed. Negotiations can also get very difficult if the buyer's agent and buyer doesn't treat you like a professional.

Con # 2 You're Not a Licensed Broker

When you hire a real estate agent, part of what you pay for is their expertise. They not only know contracts and paperwork, but they also understand the legal risk involved. Your transaction could be prime for mistakes that can cost you.

Con # 3 Marketing Costs

Real estate professionals can spend a good bit of money on advertising and marketing of their listings. If you decided to go with selling yourself, you'll have to pay for brochures, premium listing costs, etc. You may have to host your own open house and interact with buyers and agents. 

Con # 4 Emotions

Real estate transactions can become emotional very quickly. Many homebuyers have a hard time being objective when someone is telling you your home is worth less than you perceive it to be. This can lead to irrational decisions that can cost you thousands.


All things considered, we still believe most home sellers should hire a professional real estate agent to facilitate the transaction. There are certain homeowners that have a history in the industry or certain skill sets that equip them to handle the legal aspects, but most homeowners aren't equipped or willing to deal with the legal or negotiation side of selling a home.

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