Trustpilot
Loading...
Loading...Loading...
You might think you've found a great deal or a potential problem when you see a "For Sale By Owner" sign in someone's front yard. The truth is that it could go either way, and how well you prepare for the deal will determine how well it goes.
These homes are getting harder and harder to find because they only make up 6% of all sales in 2024. Let's go over everything you need to know to successfully get through this one-of-a-kind buying experience.
FSBO, which stands for "for sale by owner," is a term for homes where the owner sells the home without using a real estate agent. These sellers take the do-it-yourself approach instead of hiring a professional to handle marketing, showings, negotiations, and paperwork.
The main reason is to avoid paying commissions. In the past, the listing agent and the buyer's agent would split a 5–6% commission on the sale price of a traditional real estate transaction. That's $20,000 to $24,000 that the seller wants to keep on a $400,000 house.
But in August 2024, the math changed. The new NAR rules changed things a lot. It is no longer expected that sellers will automatically pay the buyer's agent's commission. This change means that you will be responsible for that money unless you negotiate something different during the sale.
About one out of five homes sold without a real estate agent in 1985. That number dropped to just 6% by 2024, the lowest level ever since NAR started keeping track of this data. Only 5% of detached single-family homes were sold by the owner.
There are a number of reasons why this is happening. With the need for disclosure, contract contingencies, title searches, and changing rules, transactions are now much more complicated. Digital tools made buyers expect more from professional photography, 3D walkthroughs, and smart marketing. Success rates are still low; 36% of FSBO sellers end up hiring an agent to close the deal after running into problems.
Homes for sale by owner (FSBO) always sell for less than homes sold with an agent. The average gap is $55,000, according to data from 2023. Some studies show that FSBO homes sell for about 30% less than similar homes listed by agents, but this varies by market.
Around 17% of FSBO sellers say that setting the right price is their biggest problem. Without complete market data, competitive analyses, and strategic pricing models, a lot of homeowners either price their homes too high or too low from the start.
About 43% of FSBO sellers say that buyers don't trust them because they don't have an agent. This doubt leads to lower offers or more aggressive ways of negotiating. In 2024, 38% of FSBO sellers sold to someone they already knew. These sales were worth an average of $345,000, which is almost $100,000 less than sales that were helped by an agent.
Before August 2024, sellers usually paid a total commission of 5% to 6%, which was split between the listing and buyer's agents. This model changed a lot because of the 2024 NAR settlement.
Sellers no longer have to pay buyer agents commissions. A lot of people still do this to make homes more appealing, but it's not always the case. Now, buyers may have to pay their own agents. If you hire a buyer's agent and the seller doesn't pay the commission, you'll have to pay it or work it into the terms of the sale.
People started to talk about commission rates as things they could negotiate. There were more rules about being open and honest, and buyers had to sign contracts with agents before looking at homes. If the seller didn't want to pay commissions and you want representation, you'll have to pay an extra 2.5% to 3% on top of the FSBO price. That comes to $10,000 to $12,000 on a $400,000 home.
Getting preapproved for a mortgage should be the first thing you do before looking at FSBO homes. This isn't a normal checkbox. In FSBO deals, getting preapproval can make or break your ability to negotiate.
Preapproval shows that you are serious. When FSBO sellers handle sales themselves, they take on more risk, so they are naturally wary of buyers who might back out. A preapproval letter from AmeriSave or another reputable lender sets you apart from buyers who aren't sure what they want.
It makes it clear what your price range is. Preapproval lets you know exactly how much house you can afford and what your monthly payments will be at the current rates.
Rates right now are very important. As of late October 2025, the average rate on a 30-year fixed-rate mortgage is about 6.12%, which is a lot lower than the 7%+ rates we saw earlier this year. In September and October 2025, the Federal Reserve lowered rates by 0.25%. If you lock in preapproval now, you'll be able to move quickly on the right property.
Think about how much more or less you would have to pay each month on a $400,000 home with 20% down. If the rates were 7.0%, you'd pay about $2,129 a month. That goes down to about $1,943 a month at the current 6.12% rate. That's $186 a month or $2,232 a year. The difference adds up to $66,960 in interest savings over 30 years.
When you work with a lender like AmeriSave that specializes in low rates, it makes a big difference in the long-term costs. Many lenders offer quick online preapproval, and you can find out how much you can buy within 24 hours.
A lot of buyers get stuck on this question. People who want to sell their own homes often do so to save money, so adding an agent's commission seems like a bad idea. Let's look at when representation is a good idea.
Being good at negotiating can pay off. Every day, agents negotiate sales. They know when to use leverage, how to get concessions without ruining deals, and when to use timing strategies. When sitting across from an FSBO seller who may be emotionally attached to their property, a skilled advocate keeps the business environment that is necessary for good terms.
Expertise in due diligence helps you find costly problems. Buyer's agents know what to look for when they inspect a property, how to read disclosure documents, and which warning signs to pay attention to. They find problems with title searches, survey errors, or zoning issues that most buyers might not see.
Knowing the market gives you more power over prices. Good agents have a lot of information about sales that are similar to yours, market trends, and the value of homes in your area. When FSBO sellers ask for too much money for their homes, your agent shows them proof of lower offers.
You won't have to do as much paperwork. Real estate contracts are complicated legal papers that can have big effects on your finances. Agents are in charge of writing, reviewing, and carrying out purchase agreements, setting contingency deadlines, and coordinating the closing.
Negotiation wins may help cover the cost of commissions. Studies show that sales with the help of an agent lead to better financial results. Buyers often get better terms, lower prices, or valuable concessions that are worth more than the agent's fee, even after paying it.
In some situations, going alone makes more sense. If you're buying from a family member or close friend you trust and know well, you might not need a professional to help you. People who have bought and sold real estate before and know what they're doing might feel comfortable negotiating. Simple financing and a clean title make newer homes less risky than complicated deals.
Even in these situations, you might want to hire a real estate lawyer to look over your contracts and closing papers. Legal counsel costs between $500 and $1,500, which is a small amount compared to the cost of an agent's commission.
FSBO homes are harder to evaluate than agent-listed homes because they don't have as much MLS data. You can get information about a property's tax history, square footage, lot size, and sale history from county assessor websites. Look for signs of trouble, like frequent changes in ownership or big drops in tax assessments.
Zillow, Redfin, and Realtor.com all have information on sales that are similar to yours. Look for homes that are similar to yours and have sold in the last 3 to 6 months. Take a drive through the area on different days and times. If you can, talk to your neighbors. Look at crime rates, school ratings, and plans for future development in the area.
Look over the permits and zoning. Check the property's zoning classification and make sure that any major renovations were done legally. Work that isn't allowed can cause problems with the title and getting a loan.
Don't just get prequalified; get preapproved. Prequalification is a guess based on financial information that the person gave themselves, and it doesn't carry much weight. When you get preapproved, your finances are carefully looked over. This includes checking your credit, verifying your income, documenting your assets, and analyzing your debt. The lender agrees to loan you a certain amount of money under certain conditions.
That preapproval letter shows FSBO sellers that you're ready to close. Many FSBO sellers ask for preapproval before setting up showings so they don't waste time with buyers who aren't qualified.
If you want to talk to FSBO sellers, you need to do things a little differently than if you were working with listing agents. Use the phone number or email address on the listing to get in touch. Right away, say who you are, what you're interested in, and that you're preapproved.
Get ready with questions before the showing. How long have they had it? What are they selling? What does it come with? When do they want to end? What repairs or updates were done? Bring a critical mind. Make sure to take pictures, measurements, and detailed notes. Look for cracks in the foundation, water stains, electrical panels, HVAC systems, the condition of the roof, and signs of deferred maintenance.
Find out about the neighborhood and your neighbors. FSBO sellers are often more honest than agents about things like noise levels, fights with neighbors, traffic patterns, or changes coming to the area.
This important job finds out how much the property is really worth. FSBO sellers often think their homes are worth more than they really are, so getting someone else to check the value protects you from paying too much.
Put together a lot of information about comparable sales. Find at least three to five similar homes that have sold in the same neighborhood in the last six months. Make changes for differences in square footage, condition, updates, and lot features.
Take into account repairs that need to be made. If the property needs a new roof, HVAC system, or other major repairs, take those costs off the value. Think about what's going on in the market. Are prices going up, staying the same, or going down? How long do similar properties stay on the market? Having a lot of inventory and longer market times makes it easier for you to negotiate.
You've done your research, looked at the property, and figured out a fair price. It's time to make an offer that protects your interests and is still appealing to the seller.
Begin with a written agreement to buy. They'll write this up for you if you have a buyer's agent or real estate lawyer. If you don't have a lawyer, don't write your own purchase agreement. Instead, use state-specific templates.
Include important contingencies that protect your earnest money deposit and give you a way out if something goes wrong. With a financing contingency, you can back out if you can't get a mortgage. If the inspection shows something wrong, the inspection contingency lets you renegotiate or back out. If the home appraises for less than the offer price, the appraisal contingency protects you. Clear title contingency makes sure the seller can give the buyer clear ownership.
Set reasonable deadlines for when the inspection, financing approval, and closing should all be done. Sellers who want to sell their homes FSBO often want to close quickly, but this can cause problems. Give yourself at least 30 to 45 days for smooth transactions.
Send in your offer with preapproval. Include your mortgage preapproval letter and proof of funds for the down payment and closing costs. This shows that you are a serious, qualified buyer.
FSBO negotiations are often less formal and more personal than agent-to-agent negotiations that follow set rules. Expect things to move back and forth. Most of the time, your first offer isn't accepted as is. Most of the time, sellers respond with a higher price, different terms, or both. You respond to their counter, and this goes on until you reach an agreement or leave.
Keep your feelings out of it. When you talk directly to homeowners who have lived in and loved their property, things get more complicated. Stay professional even if the seller gets upset or angry.
Don't just look at the price; look at the whole deal. Negotiations are about more than just the price. Being able to change the closing date, including appliances or furniture, cover some repairs, change the length of the contingency period, or pay the buyer's agent commission all give you more power in negotiations.
Write down everything. Never trust deals made over the phone or in person. You and the seller should both sign a written copy of the purchase contract that includes all of the terms you agree to.
No matter how much you trust the seller or how perfect the home looks, you have to do this step. In FSBO deals, inspections are even more important because sellers may not know what they need to tell buyers or may have missed important problems.
Get an inspector who is licensed and has a lot of experience. Don't pick the cheapest option or someone the seller suggests. You can find an inspector through the International Association of Certified Home Inspectors or the American Society of Home Inspectors.
Go to the inspection in person. Walk through with the inspector for three to four hours. Learn about the home's systems, ask questions, and figure out what needs to be fixed first.
Take a close look at the inspection report. Professional inspectors check the roof, foundation, structural parts, electrical systems, plumbing, HVAC, insulation, and ventilation. They write down both short-term problems and long-term maintenance needs.
Think about getting specialized inspections based on the type of property and where it is. You might need to have your septic system checked, the quality of your well water tested, radon tested, pests checked, mold checked, or a structural engineer look at your foundation.
The inspection shows problems, which is something that happens in almost every deal. Now figure out how to deal with them with the FSBO seller.
Put problems in order of how bad they are. Distinguish between aesthetic issues and functional problems or safety risks. When negotiating, focus on things that affect the value, safety, or livability of the home.
Get quotes for repairs. Get written estimates from licensed contractors for big problems. When you have three estimates that average $12,000, it's easier to tell the seller that the roof needs to be replaced.
Pick a strategy for negotiating. Ask the seller to fix certain things before closing by asking for repairs. This makes sure that work gets done, but it gives you less say over who does it and how well they do it. Ask for credits, or try to get the seller to pay for the closing costs or lower the price of the item by the cost of repairs. This gives you control over hiring contractors and managing repairs after closing. If the inspection shows serious structural, environmental, or safety problems that the seller won't fix, you can also walk away.
Be fair and put things in order. Don't get too worked up over small cosmetic problems or normal wear and tear. Pay attention to real problems, safety issues, and repairs that cost a lot of money.
Finish your mortgage application and move toward final approval now that the inspections are done and the negotiations are over. Send in the rest of the paperwork as soon as possible. Your lender wants more paperwork, such as recent pay stubs, bank statements, letters explaining credit inquiries or large deposits, and proof of employment.
Don't make big changes to your money. Between applying and closing, don't open new credit cards, buy big things on credit, change jobs, or make strange deposits. These things can stop a loan from being approved at the last minute.
Respond to lender requests right away. Underwriters often ask for more paperwork or explanations. Quick answers help you stay on track with your closing date.
Set your interest rate. Once you're sure about the timing, lock in your rate to protect yourself from rises before closing. Most rate locks last between 30 and 60 days.
Plan the appraisal. Your lender asks for an appraisal to make sure that the property's value is high enough to cover the loan amount. If the appraisal comes in low, you'll have to either renegotiate the purchase price, bring more money to the closing, or walk away using your appraisal contingency.
Title problems can stop closings at the last minute, so it's a good idea to start this process early. Owner's title insurance protects you from problems with ownership, hidden liens, forgery in the chain of title, heirs you didn't know about, and mistakes in the recording. Not all states require it by law, but it's still risky to skip it.
Take a look at the preliminary title report. The title company gives you a preliminary report that lists all the liens, easements, covenants, and restrictions that are on the property. Look it over carefully with your lawyer or agent.
Fix any problems with the title before closing. You can't own the property until any problems found during the title search, such as liens, judgment claims, or boundary disputes, are fixed. The seller who is selling their own home is in charge of giving clear title.
The final walk-through is usually set for 24 to 48 hours before closing. This is your last chance to check the condition of the property and make sure that the repairs that were agreed upon were done.
Check to see that all agreed-upon repairs were made. If the seller said they would fix the furnace, replace the water heater, or fix the deck, make sure the work was done right.
Check all of the appliances and systems. Check the electrical outlets, run the dishwasher, test the garage door opener, flush the toilets, check the faucets, and run the HVAC system.
Make sure the property is clean and empty. If the seller didn't agree to anything else, they should have moved out and left the property clean.
Write down any new problems. If you find new damage, like broken windows, missing fixtures, or other issues, take pictures of them and fix them before closing.
The big day is here. Closing usually takes one to two hours and includes signing a lot of papers, moving money, and officially taking ownership.
Take a close look at your Closing Disclosure. You should get this paper at least three business days before closing. It lists the terms of the loan, the final closing costs, and the cash needed at closing. Check it against your original Loan Estimate to see if anything has changed that you didn't expect.
Bring money that is certified and a valid ID. You usually have to pay closing costs by certified check or wire transfer. A lot of the time, personal checks aren't accepted for big amounts. You'll also need a government-issued photo ID.
Know what you're agreeing to. The closing package has a lot of papers in it, such as a promissory note, a mortgage or deed of trust, a closing disclosure, a deed, title insurance policies, HOA papers if they apply, and different affidavits and disclosures.
Get your keys and papers. After you sign and pay, you'll get keys, garage door openers, alarm codes, and copies of all the closing papers. Keep these in a safe place for tax reasons and in case you want to refinance.
Transactions that are FSBO can still be hard, even with careful planning.
Let's look at the real costs of buying a home for sale by owner.
The earnest money deposit, which is usually 1–3% of the purchase price, is held in escrow and used as a down payment at closing. If your home is worth $400,000, you should expect to pay between $4,000 and $12,000. A general home inspection costs between $300 and $500, and a more detailed inspection costs more. Depending on the type of property and where it is located, an appraisal that the lender needs usually costs between $300 and $600.
Lender fees for origination, underwriting, and processing usually make up 1–2% of the loan amount in closing costs. Title services, such as title search, title insurance, and escrow fees, can cost between $1,500 and $4,000. Recording fees are fees that the government charges to record a deed transfer. They usually range from $100 to $250. Property taxes, homeowner's insurance, and interest that must be paid at closing are all examples of prepaid items. These costs usually range from $2,000 to $6,000.
Closing costs usually range from 2% to 5% of the home's purchase price. That comes to $8,000 to $20,000 on a $400,000 home.
If you use a buyer's agent and the seller doesn't pay a commission, the buyer's agent's commission is usually between 2.5% and 3% of the purchase price. That's $10,000 to $12,000 on a $400,000 home. But keep in mind that data shows that purchases with the help of an agent often lead to lower prices or better terms that make up for or even exceed the cost of the commission.
Knowing what's going on in the bigger market can help you decide how to go after FSBO properties.
As of the end of October 2025, the average rate on a 30-year fixed-rate mortgage is around 6.12%. This is the lowest rate seen in more than a year. This drop came after the Federal Reserve cut rates in September and October 2025. These were the first cuts of the year, as the Fed had kept rates steady for the first seven months.
These better rates brought buyers back into the market after they had been sitting on the sidelines during a time when rates were over 7%. The National Association of REALTORS® said that home sales went up in September 2025 because mortgage rates went down and home prices went down, making homes more affordable.
Redfin's data from September 2025 shows that the average home sold for 1.4% less than the asking price, which is the biggest September discount since 2019. This is a big change from the crazy seller's market of the past few years, when homes often sold for more than the asking price.
This trend means that buyers who are looking to buy a home without a realtor have more room to negotiate. If homes that are listed for sale traditionally sell for less than the asking price, FSBO homes, which tend to sell for less, may be even better deals for smart buyers.
Buying a home that is for sale by owner isn't necessarily better or worse than buying one through a real estate agent. It's just different. These deals could help you save money, talk directly to sellers, and get to properties that aren't widely advertised. But they also come with more risks when it comes to proper documentation, pricing accuracy, negotiation complexity, and disclosure adequacy.
Being ready, having realistic expectations, and knowing when to hire a professional are all important for buying a home FSBO. Getting preapproval for a mortgage from a trusted lender like AmeriSave, doing thorough research, keeping professional boundaries during negotiations, and protecting yourself with thorough inspections and contingencies are all important steps to getting good results.
The data shows that transactions with agents usually have higher sale prices and go more smoothly. But if buyers do their research, know how the process works, and plan their FSBO purchases carefully, these homes can be a great deal. The most important thing is to go in with your eyes wide open, ready for problems, and with the knowledge you need to deal with them.
Are you ready to look into FSBO options in your area? Get preapproved first so you can move quickly when you find the right home. With AmeriSave, it's easy to get preapproved because you can apply online, get a quick response, and get competitive rates on all types of loans. If you want to buy a property that is for sale by owner (FSBO) or one that is being represented by a real estate agent, having your financing ready gives you the best chance of negotiating and closing the deal.
It depends on state law and who has representation, but either party can write the purchase agreement. Your buyer's agent or lawyer will usually write the contract to protect your interests. If neither party has a lawyer, it is highly recommended that they use state-approved standardized forms from their local real estate commission instead of trying to write a contract from scratch. In some states, like New York, New Jersey, Connecticut, Massachusetts, and Georgia, lawyers have to write real estate contracts. Even if you don't have to, hiring a lawyer to look over your contract and represent you at the closing usually costs between $500 and $1,500. This is a good investment to protect what is probably your biggest financial transaction.
Different states have different requirements. In some states, it is against the law for real estate transactions to not involve a lawyer. In other states, it's up to you. Even if you don't have to, hiring a lawyer to look over your contract and represent you at closing is a smart move. It usually costs between $500 and $1,500 to protect what is probably your biggest financial deal. Attorneys check purchase agreements for problems, make sure the title work is correct, make sure all necessary disclosures are made, and look out for your interests at closing. If you don't have a lawyer, you have to read and understand complicated legal papers and make sure all the requirements are met. This puts you at a lot of risk if something goes wrong.
Most types of mortgages don't require home inspections, but they are still a good idea. But not having an inspection on FSBO property is especially dangerous. FSBO sellers might not know about disclosure rules or problems that already exist, which makes getting a professional opinion even more important than with properties listed by an agent. A professional inspector checks the foundations, roofing, structural parts, electrical systems, plumbing, HVAC, insulation, ventilation, and more. They find both short-term problems and long-term maintenance needs. The inspection clause in your purchase agreement also gives you a way out if serious problems come up. You can back out of the deal and get your earnest money back. If you don't have an inspection, you're buying property without knowing anything about it and taking all the risks. This could cost you tens of thousands of dollars in unexpected repairs.
When the seller won't make repairs, you have a few choices. First, try to get the price down by the amount of the repairs. Lower the price of the house by $12,000 if the roof needs to be replaced. Second, ask the seller to give you credits toward your closing costs that are equal to the cost of the repairs. This means you won't need to bring as much cash to the closing. Third, if you're okay with the problems and the price reflects them, accept the property as-is. After closing, you'll be in charge of repairs and the quality of the work done by contractors. Fourth, use your inspection contingency to back out of the deal and get your earnest money back. If the problems are bad enough or the seller won't budge at all, this makes sense. It's very important to have an inspection contingency in your purchase agreement to keep this flexibility. If you don't have it, you either take the property as is or lose your earnest money if you try to back out.
Yes, of course. When deciding whether to give someone a loan, lenders don't care if the property is for sale by owner (FSBO) or listed by an agent. The property must still be worth the purchase price, meet minimum condition standards for the loan type, and pass title review. These requirements apply to all purchases, even if the seller does not use an agent. If you work with an experienced lender like AmeriSave, who does FSBO transactions all the time, the process will go smoothly. The lender does all the same things for your property as they would for a property that is listed for sale: they coordinate the appraisal, review the title work, process your application through underwriting, and get all the closing documents ready. Some lenders even have special teams that know all the ins and outs of FSBO transactions and can help you with any problems that come up.
FSBO sales usually take the same amount of time as sales with an agent, with 30 to 45 days from the time the offer is accepted to the time the sale is closed. However, FSBO deals can take longer if the seller doesn't know how the process works, isn't ready with the right paperwork, or runs into problems with the title or property that they didn't expect. FSBO transactions can lose steam or miss important deadlines if there isn't an agent in charge of the timeline and pushing things along. Adding extra time to your timeline helps you avoid rushing at the last minute. Also, make sure you clearly tell the seller what you expect from the timeline and check in on things that are still missing on a regular basis. If you're working with a buyer's agent, they will help you keep track of the timeline and keep the deal moving forward. If you don't have an agent, you'll have to keep track of all the deadlines yourself, like when the inspection period ends, when the financing contingency dates are, and when the closing date is.
At closing, the seller must give the buyer a clear, marketable title. If the title search finds liens, judgments, boundary disputes, or other problems, the seller must fix them before the sale can go through. Unpaid property taxes, contractor liens from work that wasn't paid for, judgment liens from lawsuits, mortgage liens from loans that weren't properly released, and boundary disputes with neighbors are all common title problems. Before closing, the seller usually works with the title company to fix these problems. Some problems can be fixed quickly by making small changes to the paperwork. Some people need to pay off debts or settle legal disputes that can take weeks or months. This is why it's so important to include a clear title contingency in your purchase agreement. If title problems can't be fixed in a reasonable amount of time, you have the right to walk away. You can get your earnest money back and look for other properties. If you don't have this protection, you might have to wait forever for the seller to fix title problems or lose your deposit.
No, usually not. If you tell the other person about your timeline pressure or deadlines, it makes your negotiating position weaker. The seller may use this information to refuse to make concessions or push for terms that are better for their timeline than yours. Except where standard contract terms require it, keep your financial situation and moving restrictions to yourself. When you talk about the closing date, give a date that works for you without going into detail about why. If the seller asks if you can be flexible, don't say that you have to move out of your current home by a certain date or start a new job in the area. The less the seller knows about your limits, the better your negotiating position will be during the whole deal. Once you have a contract with agreed-upon terms, you can be more open about how things will work and how you need to coordinate.
Fact Checked