For sale by owner

For the film, see For Sale by Owner (film).

A house for sale by its owner.

For sale by owner (FSBO) is the process of selling real estate without the representation of a broker or agent. This is where the homeowner sells directly to a new homeowner. Homeowners may still employ the services of marketing, online listing companies, but can also market their own property.

Typically, they represent themselves with the help of a lawyer or solicitor throughout the sale. As in most areas, there are detailed legal requirements pertaining to sellers and disclosures they must make.

Varieties

Some options available to the FSBO seller include:

1. Selling alone. The owner sets a price and prepares the house ready for sale. They may hold an open house, open escrow and transfer the keys to a new owner. Websites are available to list properties. Since there is no agent, no commission is paid. The two parties can obtain contractual assistance from their own lawyers or hire one lawyer to facilitate the transaction.
2. Partial assistance. Several "flat fee" listing services exist that host an owner's property on a multiple listing service so it is marketed to real estate agents locally and nationwide. In exchange for this, the FSBO seller must pay a commission to any agent that brings a buyer. The end result is that sellers spend about half of what they would have paid with a regular listing. The agent who brings in the buyer may also prepare the majority of the paperwork for the sale. Since the agent is representing the buyer, not the seller, the seller may hire an attorney to review the transaction and ensure all required disclosures are made.
3. Flat-fee and hourly home selling. Alternatively, a home seller can either pay a flat-fee or hourly fee to a real estate agent. This can be a one time payment, or an ongoing hourly home selling agreement. These allow the FSBO seller to avoid commissions but still receive a la-carte real estate agent assistance.

Market share

United States

For Sale By Owner (FSBO) refers to the process of selling a home without using a real estate agent. Historically, FSBO transactions accounted for a larger share of the U.S. real estate market, peaking at 20% in 1987. However, according to the National Association of Realtors (NAR), FSBO transactions made up only 7% of all home sales in 2023, marking a continued decline. This trend is attributed to the increasing complexity of real estate transactions and the advantages offered by professional agents, such as wider market exposure and negotiation expertise.

Despite the decline, FSBO remains popular in specific circumstances. Approximately 57% of FSBO sellers personally know their buyer, often selling to friends, family, or neighbors. FSBO homes are also more common in rural areas, where they account for 14% of sales, compared to just 3% in urban regions. While FSBO homes typically sell faster—67% close within two weeks—they tend to sell for less, with a median sale price of $310,000 compared to $405,000 for agent-assisted homes in 2023.

The role of flat-fee Multiple Listing Services (MLS) has blurred the lines between FSBO and traditional agent-assisted sales. Flat-fee MLS services, which allow homeowners to list their properties on the MLS without hiring a full-service agent, now account for 10% of all real estate transactions. This has led some critics to suggest that the true share of FSBO sales may be higher than reported by the NAR. Popular platforms for FSBO listings include Zillow, ForSaleByOwner.com, Facebook Marketplace, and OfferMarket.

Canada

Separate reports from the Canadian Real Estate Association and CTV Consumer Reports state that between 20% and 25% of homes in Canada are not sold through brokers each year (as of 2004). MSN Money suggested in 2009 that 30% of homes are sold without using a real estate agent. In that same year, more than half of the homes sold in Quebec were sold without an agent.

United Kingdom

In the UK, the average commission rate is significantly lower than in Canada or the US, meaning that FSBO is less common. By law, all sales of property must be supervised and handled by an independent solicitor, who acts as a mediator and holds the buyer's money until the purchase is complete.

Australia

In Australia, FSBO is still relatively niche market. As of 2014, privately sold houses in Canberra spent about 34 days on the market, according to RP Data – the second shortest period in the country. Canberra houses sold by private treaty spent the same time on the market as those in Melbourne; a week longer than Sydney, where houses are on the market for an average of 27 days. Privately sold units in Canberra spend an average of 54 days on the market, third only to Sydney (23 days) and Melbourne (37 days) when compared with other capital cities.

See also

• Customer to customer
• Disintermediation
• Multiple listing service
• Real estate trends