How to sell a house by owner: A step-by-step guide

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Quick insights

For sale by owner (FSBO) is a way for homeowners to sell their property without using a real estate agent.
The steps include determining a price through a competitive market analysis, marketing the property, taking photos, negotiating offers and navigating the closing process.
The potential pros include higher profits and increased control, while potential cons may be a learning curve and limited access to marketing channels.

Who needs a real estate agent? Well, most people. But if you’re a current homeowner and classic do-it-yourselfer, you’re the type who might find it exciting, and lucrative, to sell your home all by yourself. Before you dive in, there’s a lot to consider if you’re looking to turn your home sale into a DIY project. Below are some of the things you need to know to sell your house as an owner.

What is “for sale by owner” and how does it work?

FSBO is a way for homeowners to sell their property without using a real estate agent. Here’s a simple breakdown of how FSBO works:

Setting the price: Research similar properties to find a fair asking price.
Marketing the property: Create your own listings, use online platforms, social media and signs to attract buyers.
Showing the home: As the owner, you will handle property showings by giving potential buyers a personal tour.
Negotiating offers: Interested buyers will negotiate directly with you about the price and terms of the sale.
Completing paperwork: You need to manage all the necessary paperwork, including legal documents, often seeking help if needed.

Steps to selling a house by owner

Selling a house as the owner can be a rewarding experience, allowing you to save on commission fees and have full control over the process. Here are steps you can take to navigate the FSBO journey.

Determine a price

Before listing your house for sale, you’ll need to determine how much you think it’s worth to a potential buyer. Normally, when you work with a real estate agent, they have access to information that helps make a competitive market analysis (CMA) to inform a home’s value. A competitive market analysis evaluates recent home sales in your area, overall market trends and comparable houses (also known as “comps”) to help come up with an appropriate listing price.

To perform a CMA, you’ll want to look at a few things including:

Recent sales in your neighborhood
Comparable houses, or comps, in your area
Market trends–are local sales increasing or decreasing in volume and price over time?
Special amenities your house offers (pool, hot tub or a multi-car garage are just a few examples)

You can find information on recent sales on sites like Zillow or through public records databases. Homes that have already sold were priced successfully, whereas homes listed for sale are yet to be determined.

Getting a home appraisal might help you set an appropriate price. A home appraisal can cost anywhere from $300 to $600—prices vary by location and availability. A professional will do a walk-through of your home, investigate comps, recent sales and market trends, and then determine a competitive, yet realistic, price for your listing.

Photography checklist

Do a deep clean of the house: Steam carpets, vacuum, declutter, wipe down and dust surfaces. You can do this yourself or hire a cleaning service.
Rethink interior and exterior décor: This is also known as staging. Make sure things are set up to be picture perfect. Buy some new plants for the front and backyard, put coffee table books and candles out. Anything to make the home look more enticing for photos.
Complete repairs: If there are any easier less costly fixes to make, consider moving forward with this before you list.
Make it well lit: Wait for a sunny day, open the blinds and turn on the lights.

List your home without a real estate agent

There are many sites available for home listing: Zillow, Trulia, FSBO, HomeFinder and forsalebyowner.com. Some sites are free, and some charge a fee for the listing. Real estate agents usually have more access to marketing and advertising materials that will get your house in front of more buyers’ eyes, but the rise of home selling websites helps with the process of doing it yourself. In addition to your listing, you may want to consider a few marketing tactics like Craigslist, print ads, sharing on social media and telling friends and family.

Close on the sale

When closing on your home without a real estate agent, understanding the closing process is key. Here are the final steps that typically come before handing over the keys to the new owner:

Prepare documents: Gather all pertinent paperwork, including the title deed, property disclosures and any relevant inspection reports. You’ll also need to provide the buyer with the sale agreement and proof of ownership.
Select a closing method: Decide whether you’ll close in person at a title company, online through a digital closing service or by mail. Each method has its own set of requirements and timelines.
Coordinate with the buyer: Communicate directly with the buyer to finalize the closing date and any contingencies. Ensure both parties agree on all terms, including any repairs or credits that might have been negotiated.
Hire a title company or attorney: While you’re handling the sale without a real estate agent, it might be wise to consider hiring a title company or real estate attorney to assist with the closing process. They can help ensure all legal requirements are met and assist with the transfer of money.
Conduct a final walkthrough: Allow the buyer to do a final walkthrough of the property to confirm that it’s in the agreed-upon condition. This step helps prevent any last-minute disputes.
Complete the closing statement: Review and sign the closing statement, which outlines all costs associated with the sale including taxes, fees and the final sale price.
Transfer ownership: Once all documents are signed and funds have been transferred, you’ll officially hand over the keys to the new owner. Make sure to provide any important instructions regarding the property and its systems.
Notify relevant authorities: After closing, notify your local tax office about the change in ownership.

The pros and cons of selling a house by owner

Selling your home as the owner offers several potential advantages and drawbacks to consider:

Pros of FSBO

Higher profits: You can save on commission fees, allowing you to keep more of the sale proceeds.
Increased control: You have full control over your listing, pricing and showing times, helping you manage the sale on your terms.
Personal interactions: Direct communication with potential buyers fosters more personal connections, which can enhance negotiations and lead to a smoother sale.

Cons of FSBO

Learning curve: Navigating the selling process without professional guidance can be challenging, especially regarding legalities and market practices.
Time-consuming: Managing the sale, from marketing to showings and negotiations, can take significant time and effort, potentially detracting from other responsibilities.
Limiting marketing access: You may have less access to marketing channels and real estate information than real estate agents do, making it harder to reach a wide audience and gauge market trends.

Associated closing costs

When selling a home by owner, it’s critical to be aware of the associated closing costs. While you may save on real estate agent commissions, other expenses can arise. Here are some common FSBO costs to consider:

Title insurance: Protects against potential disputes over property ownership. This cost typically falls on the seller.
Transfer taxes: Many states impose taxes on the transfer of property.
Escrow fees: If you use an escrow service to manage the transaction, there will be fees associated with that service.
Home inspection costs: While not mandatory, having your home inspected before listing can help identify issues that might need addressing.
Repairs and improvements: Any necessary repairs or updates to make your home more marketable can add to your expenses.
Closing costs: Additional costs may include attorney fees (if you hire one), document preparation fees and other miscellaneous expenses. Outstanding property taxes or any liens could also be potential costs.

Switching to working with a real estate agent

Selling your home on your own can be a rewarding experience, but it can also come with its own set of challenges. If you find the process more difficult than expected, it might be a good idea to consider partnering with a real estate agent. Here are some signs indicating it may be the right moment to make the switch:

Lack of buyer interest: lf you’re not receiving inquiries or showings after a reasonable period, it may be time to reassess your strategy. A real estate agent can provide valuable insights on pricing and marketing to attract more potential buyers.
Difficulty pricing your home: Setting the right price is key for a successful sale. If you’re uncertain about how to evaluate your home’s value or have received conflicting feedback, a real estate agent can conduct a comparative market analysis to help you set a competitive price.
Time constraints: If your schedule doesn’t allow for the time and effort needed to market your home, handle inquiries and conduct showings, an agent can take over these responsibilities.
Navigating legalities and paperwork: The selling process involves various legal requirements and paperwork. If you feel overwhelmed by the complexities of contracts, disclosures and closing processes, an agent can provide expertise and ensure compliance with all regulations.
Market conditions change: If market condition shift, an agent can help adjust your strategy.
Feedback: If you’ve received feedback from potential buyers that you’re struggling to address, an agent can provide guidance on improvements that may increase your home’s appeal.

In summary

Selling a house without a real estate agent can be a time-consuming and potentially challenging task. But selling a house by owner becomes more common with the help of new real estate websites and more access to information online. Selling a house without a real estate agent may not be as easy as it sounds, but it’s an option for a homeowner. It could be worth speaking to a tax professional or a professional for legal advice.

FAQs about FSBO

Selling your home without a real estate agent can raise many questions. Here are some common FAQs to guide you through the FSBO process:

Who pays closing costs when selling a house by owner?

Both the seller and buyer may share closing costs. Sellers usually cover title insurance and transfer taxes, while buyers handle inspections and loan fees.

What is required to sell a house by owner?

You need to prepare your home, set a competitive price, market it and manage the legal aspects including contracts and disclosures.

What documents are needed to sell a house by owner?

The documents you will likely need to provide include the property deed, seller disclosure statement, purchase agreement and any relevant inspection reports.

What fees are associated with selling a house by owner?

Common fees include title insurance, transfer taxes, closing costs and potential marketing expenses.

When selling a house by owner is escrow money taken?

Yes, buyers typically provide an earnest money deposit held in escrow, which is applied to the purchase price at closing.

Who draws up the contract in for sale by owner deals?

The seller can draft the contract, but it’s best to involve a real estate attorney or title company for legal compliance.