For Sale By Owner vs Realtor: What to Consider When Selling Your Home

A man walks by two modern homes on a brick street.
Tina Russell/The Penny Hoarder

Getting ready to sell your house? Then it’s time to consider whether to hire a real estate agent or go it alone.

If you have some experience with real estate, you might feel equipped to sell your own home and cash in on the savings of not paying a Realtor. Going the “for sale by owner” or FSBO route can be a great option for some sellers, but it’s not for everyone.

We’ll explain some pros and cons on each side of the for sale by owner vs. realtor debate.

What is a FSBO?

Rather than hiring a real estate agent to market, show, and ultimately sell your home, in a for sale by owner transaction you’ll be doing all of those things yourself.

A lot of people think selling their own home can’t be that difficult. After all, you know more about your house than anyone, right? But there are factors to consider before committing yourself to the many hours (and legalities) that go into selling a home yourself.

Here are a few to keep in mind:

FSBO: Pros and Cons of Selling Your Home

Pro: Control
You’ll have full control over how the homeselling process goes, at least on your end. You’ll schedule home showings and open houses, arrange inspections and review contracts. But with great power comes great responsibility.

If you’ve never read a home inspection report or a home sale contract, you may quickly find yourself in over your head. And you’ll want to make sure you’re prepared to manage the many tasks that go into selling a home solo.

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Con: Objectivity

Just like we all tend to think our children are the cutest kids ever, you also probably have some serious unconscious bias about your home.

Lacking in objectivity can make a sale challenging. For one thing, home value isn’t based on feelings — it’s based on numbers. Many real estate agents have a pretty good understanding of your home’s true market value, but you may not.

Objectivity also comes in handy when buyers are viewing your home, since they’ll have plenty of questions and requests and naturally, complaints. If you plan on selling a home via FSBO, be sure to base your pricing on concrete market data (Zillow has a great tool for this) and be prepared for picky buyers.

Con: Negotiation 

The best real estate deals happen during negotiation. It’s rare to price a home, and have a buyer agree to buy it outright. Most deals happen over days (and sometimes weeks) of negotiation, with each side trying to get the best possible deal.

Even if you were captain of your high school debate team, winning these deals without the market knowledge of an agent can be tough.

What Happens When You Hire a Realtor?

When you hire a real estate agent, you’ll have professional expertise on your side through the process. Your agent will list it, show it, stage it, either with real furnishings or virtually, handle the negotiation and sit with you at the closing to watch out for your interests.

Here are some of the pros and cons that go along with hiring a real estate agent:

Working with A Realtor: Pros and Cons

Con: Money 

Real estate agents work off a commission, meaning they’ll get a cut of whatever your home sells for. According to a 2019 survey conducted by Effective Agents, the average commission

that year was 5.7%.

So if your home sells for $200,000, at 5.7% the commission would come out to $11,400 and you’d walk away with $188,600.

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Pro: Also Money

While you’re pondering if hiring an agent is worth the 6% in commissions, keep in mind the money you’ll be making by hiring one.

In 2017, the National Association of Realtors found that the median selling price for homes sold by agents was $60,000 to 90,000 higher than those sold via FSBO — which, in most cases, still puts you on top after the 6% payout.

Pro: Time + energy

Selling a home is a lot of work. “Most people who sell their own home are trying to avoid paying the commission,” says Maria Quattrone, CEO of Maria Quattrone & Associates at RE/MAX @ HOME. “But it’s a full-time job to list, sell, negotiate and close on a home, especially when it’s not your area of expertise, and time is money.”

Before deciding to sell your own home, consider whether you can realistically make the time commitment.

The final word

No one can tell you for sure whether you’re better off hiring a real estate agent or going the FSBO route. Before leaping into either situation, do your research.

Ask your friends for agent recommendations, and start reading up about selling a home via FSBO. The more you know, the better you’ll be able to decide if taking on the sale yourself is really the right move or if you’d be better off working with a professional.