In 2025, buying an FSBO (For Sale by Owner) home remains an appealing option for many buyers. For Sale By Owner (FSBO) means the homeowner is selling the house without a real estate agent. In 2024, these homes accounted for 6% of all U.S. home sales.
On top of this, in 2024, a typical FSBO house was sold for around $380K compared to $435K for agent-assisted sales. This difference suggests buyers can often save tens of thousands of dollars by choosing an FSBO listing.
What Is For Sale By Owner?
For Sale By Owner (FSBO) refers to a process where a homeowner directly manages the sale of their property without involving a real estate agent. The seller traditionally pays a 6% total commission, but now commissions are negotiated directly with buyer agents
Buying a house would be a big step so it’s better to get a mortgage in advance to get things done smoothly in the buying process.
How Does For Sale By Owner Work?
In FSBO, both parties directly negotiate the property’s price and terms and conditions. This includes- setting the price, advertising, staging homes, conducting open houses, etc., This gives buyers full exposure of the buying process.
However, since there is no third party involved in the transactions, both parties need to be cautious at each step. This helps them ensure that all legal and financial aspects of the transaction are handled correctly.
How to Purchase a FSBO Home?
America’s competitive real estate market gives buyers a chance to save money through FSBO websites. However, buying a home For Sale By Owner comes with challenges like paperwork, negotiations, showings, etc.
Want to overcome this and learn how to sell a home by owner? Here are the steps:
1. Get Pre-Approved by a Mortgage Lender
86% of sellers favor buyers with a pre-approval. So, get pre-approved before house hunting to show you’re serious about the purchase and financially capable. It also speeds up the buying process, helps you negotiate better, and reduces delays in the transaction.
2. Find Your FSBO Home
You can find FSBO home through FSBO Websites like Houzeo, Zillow and Trulia. Additionally, you can also find FSBO listings on websites that focus only on FSBO homes, such as FSBO.com and ForSaleByOwner.com. You can also attend local property auctions or open houses.
FSBO homes are not always listed on the multiple listing services (MLS), which is the main platform real estate agents use to find and share properties. Some services can list FSBO homes on the MLS for a fees but many FSBO sellers choose to list for free on other websites.
3. Visit the Neighborhood
Visit the neighborhood to catch what online photos miss, street noise, neglected yards, or poor curb appeal. Listings can be misleading, so seeing it in person helps you spot red flags and get a true sense of the area.
Drive or walk around to assess the home’s upkeep, safety, and access to essentials like schools, parks, and stores. Pay attention to how the place feels, comfort, cleanliness, and community vibe matter as much as price.
4. Secure the Financing
Secure the financing early to show sellers you’re a serious buyer. You can either pay in cash or choose from three main options, permanent, short-term, or seller financing.
Permanent financing is your standard long-term mortgage, while short-term loans work best for quick renovations or flips. In seller financing, the seller acts as the lender, and you make monthly payments directly to them instead of a bank.
5. Make an Offer
Make an offer once you’re confident about the property’s value. Assess recently sold properties in the area and perform a comparative market analysis (CMA) to understand a fair price before you negotiate.
Include contingencies to protect your interests—like a home inspection contingency that lets you withdraw if the property fails inspection or other agreed conditions aren’t met by the seller.
6. Perform Home Inspection & Appraisal
Your offer is accepted! But you need to do your due diligence. A house inspection is a crucial step, particularly in flood-prone areas like Chicago and East St. Louis. Home inspection costs depend on the property’s location, condition, and age.
A standard home inspection should cover:
- HVAC: Ensures the heating and cooling systems are functioning properly.
- Plumbing: Checks pipes and fixtures for leaks or damage.
- Electrical: Evaluates safety and functionality of the electrical system.
- Roofing: Assesses the roof for wear and potential issues.
- Foundation: Examines for cracks or structural problems.
Once the inspection is complete, schedule a home appraisal to confirm the property’s value aligns with the loan amount.
Pros and Cons of For Sale By Owner
More buyers are choosing FSBO, with 19% of Boomers, 17% of Millennials, 24% of Gen Xers, and 4% of Silent Gen going this route. However, before you jump on the bandwagon, you must consider the pros and cons of FSBO:
✅ Pros
- Cost Savings: You can get FSBO homes at a lower price.
- Property Details: Buyer can get direct details from the seller.
- Offer: Buyer can negotiate with the seller directly.
- Handling Process: Contact the owner directly to gather more information about the property and the neighborhood.
❌ Cons
- Limited Assistance: Handling paperwork, inspections, and negotiations on your own can be overwhelming without the right support.
- Potential Hidden Costs: Several FSBO listing services with low upfront costs may have a high hidden fee at closing. Additionally, Since it is direct communication, a seller might ask for an unrealistic price.
- Hidden Property Details: Seller may not disclose all important details, so you could miss out on something crucial.
- Handling Process: Buyer has to take care of paperwork, inspections, and legal matters on their own.
Should You Buy a FSBO Home?
FSBO is a suitable option for buyers who want a hands-on approach and prioritize cost savings. However, buying a home without an agent can be risky. It is because you may not have all the information you need as a buyer.
Buyers can gain a clear understanding of the FSBO process, potentially save on costs, and enjoy a more efficient buying experience.
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