Selling Without a Realtor? Understand the Challenges

For sale by owner (FSBO) is a term that refers to the process of selling your house on your own and not using a real estate agent. People often choose this route for reasons such as wanting more control over the process, feeling like they can get a higher price than if they go through an agent, or because their home has been on the market for too long with no offers. There are many challenges when it comes to FSBOs—we'll talk about some of them in this article so you know what to expect before you take this approach.

What Exactly is FSBO?

First, let's define for sale by owner. For the purposes of this article, we are defining it as selling your home without using an agent to help you with the process—not even a buyer's agent who would work on commission only.

Why Sell Without an Agent?

There are many reasons why people choose FSBOs rather than going through a real estate agent. Some people have had negative experiences with agents in the past, so they don't want to deal with one again—or even worse, think their next house won't sell if they go through an agent. Other reasons include wanting more control over the process and being able to get a higher price because there are no commission fees involved.

What Challenges Are There with FSBOs?

It's important for you to understand the challenges associated with selling without an agent so you know what you are getting into before taking this route.

1. Not Being on the MLS:

   One of the biggest challenges is not being able to list your house on the local MLS, which means it's difficult for buyers who are looking in that area to find you—and if they can't find you, then there is less chance that an offer will come in. Not being on the MLS also means that buyers who are looking to buy a house with an agent won't see yours, and they may not be as interested if it's listed without one.

2. No Guaranteed Sale:

   Another challenge is that FSBOs don't have a guarantee of sale like those who use an agent do. Because you're not paying someone to help with the process, your house won't sell unless it meets all buyer qualifications—and even then there's no promise they'll put in an offer. This means if buyers aren't willing to come in with your asking price or they don't meet other criteria required of them, then you may end up having the house on the market for longer than if it was listed through an agent.

3. Having to Rely on a Buyer's Agent:

   One thing that FSBOs often complain about is how they need to rely on a buyer's agent to get through the process. Because they don't use an agent, FSBOs have to learn how certain elements of the transaction work and figure it out on their own, which can be difficult for some—or in other cases they may know a little bit but not enough to make them feel comfortable going forward without help from someone who is more experienced.

4. Getting a Lower Offer:

   One of the biggest challenges is that FSBOs often get less money for their home than if they went through an agent. Agent commissions are usually paid by the buyer, and because agents have more experience with transactions, it means buyers will trust them to be able to help negotiate—making your chance of getting the full asking price higher.

5. Problems with the Closing Process:

   Another challenge that FSBOs may not be aware of is how they can't handle all aspects of the closing process without an agent. Some things like making sure you don't have any liens on your house, ensuring there are no problems in escrow, and reviewing legal documents need to be handled by someone who is more experienced and knowledgeable about the process.

6. Final Thoughts

   It's important to know all of these challenges before deciding whether or not FSBOs are right for you—and if they're really worth it in your situation. For some people, this route works well and they're able to get the price they want for their home, but others may find that it's not as easy as they thought.