For sale by owner–also known as FSBO or “fizzbo”–means selling a piece of property on one’s own rather than with the involvement of a third party. In real estate, FSBO sales are when a person does not utilize a real estate agent and instead personally handles every step of the sale. Sellers may wish to do so for various reasons, though the most common reason is to avoid paying commissions. However, selling without an agent can be difficult and time consuming, as sellers must personally handle all activities that agents otherwise would. Examples include marketing, house showings, negotiations, and paperwork (both financial and legal). Additionally, sellers who do not use an agent generally make less on the sale than they would have with an agent, even taking commissions into account. To mitigate these issues, sellers considering not using an agent should make sure to research and understand: (1) the sale process in their area; (2) how to properly value their property; (3) effective marketing strategies and how to stage and show their house to potential buyers; and (4) which terms are most crucial for the final sale and how to best negotiate them.
[Last updated in August of 2021 by the Wex Definitions Team]