A Complete Guide to Buying For Sale By Owner Homes

illustrated woman standing outside a home for sale by owner

Published April 11, 2024

Written by The Real Estate Witch Team
Edited by Kristy Snyder

What is FSBO? | Pros & cons | Where to find FSBO homes | How to buy a FSBO home | FAQs

Sometimes sellers decide to list their home without a real estate agent — called a for sale by owner or FSBO sale — to save money on the listing agent’s fees. These FSBO homes aren’t always listed on the MLS or popular real estate sites, making them harder to find, but they could be a good opportunity to expand your home search and diminish competition from other buyers.

FSBO homes can also sometimes be a better deal than an agent-sold home. According to a 2022 survey of 1,000 home buyers by Clever Real Estate, 73% of respondents believe they or their agent can out-negotiate FSBO sellers, meaning you might score a big discount.

✍ Editor’s take

Buying a FSBO property is a good strategy to consider, but you should be aware of the risks and protect yourself by making offers contingent on appraisal and inspection. We also recommend working with a buyer’s agent and establishing upfront that the seller still needs to pay their commission fee.

What is a for sale by owner property?

A FSBO home is one where the seller handles the sale of their home themselves instead of working with a listing agent. They deal with all of the marketing, paperwork, and legal aspects of the home sale on their own, which can be especially difficult for novices.

Since FSBO sellers aren’t real estate agents, their homes aren’t always listed on the MLS, making them harder for buyers to find. That said, there are flat fee MLS services available that allow FSBO sellers to get their listings on the MLS, as well as most major real estate websites like Zillow and Trulia.

Buyers can benefit from the fact that inexperienced FSBO sellers often struggle with pricing their home and negotiating a final deal. With the right buyer’s agent, FSBO sales result in better deals for buyers whose agent can assist in out-negotiating sellers.

Need help finding an expert buyer’s agent? We can help you find a knowledgeable local agent that has experience working with FSBO sellers. And you can qualify for cash back just for using the service!

Benefits of buying property for sale by owner

✅ More choices — Considering FSBO homes in your search expands the possibilities by including homes that may not be listed on the MLS or traditional home search sites.
✅ Less competition — Since not all buyers look for FSBO listings (only 70% of home buyers consider FSBO homes), they can have less competition or receive fewer offers.
✅ Cheaper sale price — Some studies show that FSBOs tend to sell for tens of thousands of dollars less than agent-sold homes.
✅ Advantage in negotiations — Many buyers believe they or their agent can out-negotiate novice sellers.
✅ Direct contact with the seller — Some buyers also like the more personal element of speaking to the homeowner, rather than only communicating through agents.

Downsides of buying property for sale by owner

🚫 Inexperienced sellers — FSBO sellers are not professionals, so they won’t always know how to properly do paperwork and might make mistakes or break laws they’re not familiar with, which can cause sales to fall through.
🚫 Excessive listing price — FSBO sellers often misprice their homes because they have a personal attachment to the home and overestimate its value.
🚫 Unwillingness to compromise — The personal connection to the home and desire to minimize expenses can sometimes make FSBO sellers resistant to doing any work on the property or making concessions.
🚫 Inadequate disclosure — It’s especially important to do your due diligence and get an inspection and appraisal when working with FSBO sellers, as they may not be aware of all the disclosure requirements for selling a home.
🚫 Low or no buyer’s agent commission offered — Since most FSBO sellers are trying to save money on commission, some will also offer below-average or even no buyer’s agent commission. It’s rare, but if that’s the case with a FSBO home you want to buy, you might have to pay for your agent’s fees.

🎯 Quick tip

We recommend that you request the sellers acquire a CLUE (Comprehensive Loss Underwriting Exchange) report, which tells you about any insurance claims filed in the last five years. You could even offer to pay for this, as it only costs about $20 and provides important information about things that have gone wrong with the house recently.

Requesting this before submitting an offer allows you to minimize risk of undisclosed issues with the property.

» MORE: Learn more about including contingencies in your offers

Where to find for sale by owner homes

If a FSBO seller uses a flat fee MLS service, your agent will be able to see the property on the local MLS, and it will also likely appear on major real estate websites like Zillow, Realtor.com, Trulia, and others. If they don’t, then you may need to look on FSBO-specific sites when searching.

FSBO listing sites

FSBO site	Description
Fizber	Fizber has significantly fewer listings to look through than a site like FSBO.com, but it's relatively easy to use.
FSBO.com	FSBO.com has a solid volume of listings, but it's not as easy to navigate as a site like Zillow.
Craigslist	Craigslist listings are often lower-priced, but many are sold as-is — meaning sellers won't do any work to fix up the place.
Facebook Marketplace	Facebook Marketplace listings are free, so you get various levels of professionalism, and the volume of listings is mediocre.
ForSaleByOwner.com	ForSaleByOwner.com is dedicated exclusively to FSBO listings, but it's less popular than FSBO.com.
Zillow	Zillow requires you to filter by "for sale by owner" or click on the "Other Listings" tab to find FSBO properties, which isn't super intuitive.

» MORE: Check out our list of the 12 best for sale by owner websites in 2022

How to buy for sale by owner homes

Buying a FSBO home is not significantly different from buying an agent-listed home. The biggest difference will be the added caution you’ll need in dealing with a seller who isn’t an experienced professional and the additional work your agent may need to take on.

Step 1: Find an agent

Though not required, we recommend you work with an agent to advocate on your behalf. This is especially important when the seller doesn’t have an agent, as you’ll want a professional looking over and handling the paperwork, ensuring the sale is progressing through all the required steps on time, and that you’re getting correct information about the home.

We can connect you with a top agent to represent you in a FSBO sale.

Step 2: Get pre-approved

If you’re not buying with cash, then you’ll likely need financing to purchase the home. Getting pre-approved early in the process and submitting a pre-approval letter with your offer can make it more competitive and appealing to sellers.

» MORE: The difference between pre-approval and pre-qualification

Step 3: Find a property

A good agent will be able to help you locate properties that may not be listed on the MLS. You can also find many listings on real estate websites like Zillow or Craigslist, but locating the contact info to schedule showings or ask questions can vary from one website to the next.

On Zillow, for example, you need to scroll down to the “Overview” section and click “Property Owner” to contact the seller directly. On Craigslist, the contact info may be in the License Info box or in the description.

If the contact info is for a flat fee MLS broker, they’re acting as a middleman, so expect slower communication.

» MORE: What does off market mean?

Step 4: Make an offer

Once you find a house you want, your agent will need to contact the seller and submit your offer, including any terms or contingencies you want. Be sure to specify that a trustworthy third party — like your agent’s brokerage — will handle the escrow deposit.

» MORE: What does under contract mean?

Step 5: Negotiate terms and contingencies

After you submit an offer, the seller can counter with their own requests. We recommend that you stand firm on contingencies that protect you from the risks inherent in buying FSBO properties. These include inspection and appraisal contingencies, but you’re welcome to include other contingencies if you and your agent think they’ll help protect you.

» MORE: What does contingent mean?

Step 6: Order inspection and appraisal

If you are getting financing, these will probably be required by your lender. We suggest you do them regardless to ensure you know what you’re getting with your FSBO home and that it’s worth what you’re paying.

» MORE: How do appraisals work?

Step 7: Negotiate repairs or credits

If there are issues with the house, you can negotiate with the seller to either repair damaged areas or give you credit toward making the repairs yourself after closing.

» MORE: Common repairs when selling a home

Step 8: Close!

Come closing day, once a title check and insurance verification are completed, you’ll need to sign some paperwork in person to legally transfer the home. This process could take anywhere from 30 minutes to several hours depending on where you live.

» MORE: Conducting a property title search

Once the paperwork is finalized, the deal is done. Congratulations, you are now the proud owner of your FSBO purchase. Enjoy your new home!

To ensure this entire process goes smoothly, you’ll want to make sure you have an expert agent on your side.

FAQs about buying for sale by owner homes

How do you negotiate when buying a FSBO home?

Negotiating for a FSBO property is similar to negotiating for an agent-sold home, but you're dealing directly with the seller instead of an intermediary. You'll locate the property, submit a written offer, and they'll counter-offer, deny, or accept your offer.

Often, sellers may be more flexible in negotiations (particularly on price), but they might also be more influenced by emotions since it is their house.

Should I buy a FSBO?

There are advantages and disadvantages to buying for sale by owner (FSBO) homes. On one hand, you might get a cheaper sale price since FSBO sellers don't have to pay a listing agent's fee and probably aren't professional negotiators. On the other hand, they may not be familiar with the process, which may cause issues with paperwork and disclosures. You can mitigate these risks by working with an agent experienced with FSBO properties and including contingencies in your offer.