For sale by owner (FSBO) means that you sell your home without a real estate agent’s help. While this approach can save you time and money, it is very involved. To successfully sell FSBO, you should understand how to price, market and negotiate.

The Pros of Selling FSBO

There are several benefits to selling FSBO, including saving time and money.

1. Complete Control

A real estate agent can be helpful. However, the hands-off process of working with an agent can leave you with little control. You are in charge of selling FSBO. All communications and decisions go through you.

2. No Commission Fees

Saving money is the best thing about FSBO. In Utah, agents charge a 4.68% commission fee on average. That figure might sound small, but it adds up. If you sell your home for $550,000, you’d pay your agent $25,740.

3. Streamlined Buyer Negotiations

Since buyers speak to you directly, you can streamline negotiations. Direct communication is more efficient than conversations that go through real estate agents on both sides.

The Cons of Selling FSBO

Selling FSBO has some potential financial and legal drawbacks.

1. Less Buyers

Working with a real estate agent costs money for a reason. They help you attract prospective buyers, ensuring your property generates interest quickly. Your methods may not reach as many people and you may have fewer contacts to begin with.

2. Legal Issues

Utah has several disclosure laws. For instance, if your house was constructed prior to 1978, you must tell potential buyers about the possible existence of lead before closing. You also have to provide any records of lead paint within the home and a pamphlet on lead exposure. The law states you must keep a signed copy of the disclosure for three years. When in doubt, prioritize transparency since inspections will uncover any major problems.

3. Lower Offers

The fewer people interested in your house, the fewer options — and less leverage — you have. During negotiations, you may have to take an offer under your asking price.

Additional Considerations for Sellers

Consider whether you prefer buyer financing or cash. The latter streamlines the homebuying process. Sales that require mortgage approval can take as long as 45 days to close, while cash-only offers can take 10 days.

You should also be aware of marketing and closing costs, which take a small percentage of your revenue. Hiring a photographer, appraiser or real estate attorney can be expensive. There are also title transfer, courier and inspection fees to consider.

The Step-by-Step Process of FSBO

Here are the five steps of selling FSBO.

  1. Conduct Market Research

Market research is crucial. Around 15% of FSBO sellers say they have trouble pricing their property, leading to them getting $95,000 less than they would have with an agent. Use nearby properties to get a ballpark valuation.

  1. Set Your Listing Price

Your proximity to schools, railroad tracks, stores and busy intersections can affect your property value. Landscaping, siding color, square footage, fencing and number of stories are also factors. Be wary of overpricing or underpricing, which can make your listing less attractive to potential buyers.

  1. Market Your Property

Get market-ready by decluttering, improving the curb appeal and staging your house. Ensure your listing is detailed and highlights attractive aspects of your home. When it comes to listings, 41% of homebuyers agree photos are useful, 39% appreciate detailed property information and 31% value floor plans.

You can list your home on a database of properties or on public real estate marketplaces. Some platforms may require a listing fee but will increase your reach. Consider it an investment to maximize your post-closing revenue.

  1. Negotiate With Buyers

Consider buyer financing, contingencies and cash offers during negotiation. Don’t take the first offer you receive. However, be aware that you may have to lower your asking price to get more offers.

  1. Handle Closing Paperwork

You will need your deed, disclosures, inspection reports and sales agreement for the closing. You can close at a title company, by mail or online through a closing service. Coordinate with the buyer to set a date. Finally, transfer ownership and notify your local tax office about the ownership change.

Maximizing Profit When Selling FSBO

While FSBO can be challenging to navigate, many homeowners do it successfully. If you decide it is right for you after considering the pros and cons, ensure you follow through with all financial and legal requirements to make the process as seamless as possible.

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