Merit Real Estate

For Sale By Owner: The True Costs

For Sale by Owner

When it comes to selling a home, homeowners have a few options. Most homeowners will contact a local Realtor to list their home for sale and market it to prospective home buyers. It is well-known that this method involves paying a commission to the Realtor once the home is sold. The customary commission rate is 5 to 6 percent of the price that the home sells for. For many home sellers, paying a large commission to a real estate agent does not seem to be a value for them. If you choose not to have a Realtor help you sell your home, another option is to sell it yourself. This type of listing is called a ‘For Sale by Owner’ or ‘FSBO’.

Selling a home without the help of a Realtor means that the homeowner is able to save thousands of dollars in commission. Going the FSBO route also means that the homeowner is responsible for executing every step of the selling process. Even though they are not paying that hefty commission to an agent, there are still costs that the seller will need to cover. Selling a home without an experienced real estate professional could also lead to financial loss as a result of incorrect pricing, minimal marketing, excessive time on the market, poor negotiation, and other factors.

We will now dive into the costs of listing your home ‘For Sale by Owner’ and the potential loss of equity from making mistakes due to lack of experience selling homes.

Out of pocket expenses of a ‘for sale by owner’ listing

When enlisting the help of a licensed real estate pro to sell your home, you save yourself from paying all of the costs associated with marketing the property. These expenses can add up pretty quickly depending on how well you want to market your ‘for sale by owner’ listing. For many, this is still way better than forking over a big commission to the agent once the home is sold. Here are the marketing expenses you will need to pay for when selling your home yourself.

Preparing your home as a ‘for sale by owner’

You will want your home to look it’s absolute best when showing it to droves of potential buyers online and in-person during showings. Some Realtors will pay for the costs of a one-time cleaning of your home and to stage your home professionally out of their own pocket if you list your home with them. As a ‘for sale by owner’ the cost of getting your home ready for the market will be covered by you. This expense can vary greatly depending on how much preparation you want to do and how you go about doing it.


You will want to deep clean your home before inviting buyers to see it. You can always make a trip to Target, purchase $50 to $100 of cleaning supplies, and clean your home yourself. Another option is to hire a cleaning person or a small crew. This will typically cost you anywhere from $150 to $350 (depending on the size of your home).


Staging your home is an option you may want to consider. The meaning of the term “staging” is quite variable. The high end of staging is hiring an interior decorator to style your home with a collection of furnishings and accessories. The lesser, more cost-effective end of the staging spectrum would be the homeowner making small changes to their current design/decor by moving furniture, adding accessories, or by removing accessories and furniture. Professional staging expenses can range between $1000 and $8000 (depending on the number of rooms in your home). This may seem like an unnecessary expense but staged homes are proven to sell faster and for a higher price.

For sale by owner signage

One of the single most important marketing actions you can do to get the word out about your ‘for sale by owner’ listing is to put a big ole’ “FOR SALE” sign in your front yard. At the very least, this will get your neighbors talking! More importantly, the sign in the front yard will attract the attention of anyone passing by. The purchase of a sign panel and signpost will cost between $25 and $75. Add $15 for a box/tube to display information flyers. You can order these products here on

Selling a home without an agent
The yard sign is a must when selling a home.

Photos and video of your ‘for sale by owner’ listing

We live in an ‘online world’. It should come as no surprise that the buyer of your home will almost certainly see it for the first time online. If you do not market your home with clear and compelling visual media, potential buyers will pass right by your listing. No picture usually means no ‘click’. You can always take photos and videos yourself, but it’s likely that the quality of your media will not do your home justice. Keep in mind that most of the other homes for sale in your area will likely be marketed with photos and videos produced by a professional.

The average cost of a photo package from a professional real estate photographer ranges from $150 to $300. If you wish to add a video, the cost will increase from about $100 to $200.

Marketing your ‘for sale by owner’ listing

A Realtor will blast your home across all real estate websites and social media in order to attract the attention of potential buyers. When you list your home with a Realtor, they will upload media and information about your home to the Multiple Listing Service (MLS) so that other local Realtors have direct access to see your home.

In addition to the online marketing of your listing, there are non-digital marketing activities to consider as well.

MLS and Web Syndication

When your home is listed on the MLS, it is automatically syndicated to all the major real estate websites and apps (Zillow, Trulia,, etc) that buyers search on. The good news for the FSBO is that you can list your home on the MLS without signing a contract with a Realtor. There are many online real estate services that will list your home on the MLS for a flat rate. This rate typically ranges from $100 to $500.

Social Media

A good Realtor knows how to target potential buyers for a particular listing on social media channels such as Facebook, Instagram, and Youtube. They accomplish this by purchasing targeted advertising on these platforms. This is a cost that agents pay for out of their own pocket in hopes of selling their listing quickly and making a commission. As an FSBO, the homeowner would incur this cost if they wanted to market their home on social media. These advertising costs can range from $100 to $1000 or more depending on how long you run your ads and how many people you want to reach.

Selling a home on social media
Homes for sale get tons of exposure on social media

Print Advertising

The amount of money spent on print advertising has dramatically decreased over time. It is a good idea to produce color flyers for your home to disburse to neighbors and potential buyers. The cost of printing 1000 full-color flyers ranges from $65 to $200.

Open Houses

Realtors typically hold one to three open houses on average for a given listing during its time on the market. Open house events don’t typically cost much to put on. You will most likely want to invest in at least one “open house” sign to display in your yard during the event. This will let neighbors, buyers, and people passing by know your home is open to view. Snacks and refreshments are a nice touch but not required. The sign will run you about $30. Shop open house signs here.

For sale by owner open house
Holding open house events is a great way to find buyers.

How much is your time worth?

The biggest thing that optimistic sellers underestimate when deciding to sell without an agent is the amount of time they will spend on this ‘DIY project’. Think about it, you will be wearing many different hats when selling your home. You will be handling everything from market research to showing the home to paperwork. Don’t discount how much your time is worth and consider how much of your time will be spent on the various activities and tasks you will be required to perform in order to get your home sold. Here is a list of the time-consuming activities you will need to do.

  • Market research
  • Marketing
  • Taking phone calls from prospective buyers, nosey neighbors, and curious Realtors
  • Conducting showings
  • Negotiating terms
  • Paperwork
  • Communication between the buyer, the lender, the title representative, and the escrow officer

Cutting corners could cost you

Pricing right
It is important to price right and negotiate well when selling a home.

As you can see, the costs of selling a home can really add up. If you are thinking of selling your home yourself, it is probably because you don’t see the value of having a Realtor do these things for you. You may not think that it is important to get professional photos. Or maybe you believe that listing your home ‘for sale by owner’ with Zillow is enough web exposure to find the buyer for your home. After all, you only need to find one buyer…right?

The truth is that Realtors spend all that money out of their own pocket and do all of these activities because they know that it will help produce more potential buyers and a higher level of interest for the homes they list. Since there is a decent amount of inventory (homes for sale at any given time) in most markets, buyers have plenty of homes to choose from. If your home doesn’t appeal to buyers when they see it online, they may not even consider scheduling a showing to see it in person.

The more people that you can get to see your listing (online or in-person), the better chance you have of getting an offer. The real win comes when you have several buyers interested in buying your home at the same time. This can produce a bidding war and can cause buyers to offer more for your home.

The value of real estate experience

If you have ever seen an advertisement from a real estate professional, you know that they are always boasting about their experience. There is a reason why they want you to know that they have sold a boatload of homes. Selling homes is literally what they do all day, every day. The experience that a Realtor brings to a homeowner is well worth the 5 to 6% commission that they get paid when the home is sold. When selling a home, a few wrong steps can cost you thousands of dollars! Here are the pitfalls that can cost you big time.


A good Realtor basically earns their commission here. Pricing a listing correctly out of the gate is so important. Sometimes, it is difficult for a homeowner to see the true value of their home. The issue is that homeowners often attach a sentimental value to their home because of all the memories they have created there. Homeowners may also see the custom upgrades they have done to the home differently than a prospective buyer would. Pricing your home too high when you first list it will most certainly minimize any excitement created by a new listing hitting the market. The first two weeks of listing your home for sale is when buyer excitement and activity is highest. This early period is when you are most likely to see a bidding war if your listing is priced appropriately.


Overpriced homes will sit on the market longer. If the price is not adjusted quickly, an overpriced home will accumulate days on the market. When a listing has been on the market for a long time, it develops a stigma with buyers. They begin to wonder why it has not sold. Often, the perception is that there is something wrong with the home or the neighborhood. Excessive days on market for any listing is a bad look and can cause buyers to value it even lower than the home’s true market value.


Pricing a home for sale just under the market value can actually be a good strategy in the right type of market. In some market conditions, that strategy can cost a homeowner valuable equity. It is important to know the price trends in your area over the past six months and what comparable homes in your neighborhood are selling for. This is where a local real estate pro can flex their experience.


Even as an FSBO listing, there is a good chance that your buyer will be represented by an agent. This agent is going to do their very best to negotiate great terms for their clients. When negotiating things like sales price, conditions, timelines, inspections, and buyer contingencies, you want to be careful not to agree to something that will cost you money and cause you headaches. After the initial purchase contract is agreed to, there may still be a list of repairs requested by the buyer. This is a situation where tough negotiation skills can be valuable.

Real Estate Negotiation
An experienced agent will negotiate the best terms for you.

Contracts and disclosures

Buying and selling real estate is a big deal. When you sell your home, you’ll want to make sure every single term is agreed to in writing. It is also very important that you complete the proper disclosure documents required by your state. If these disclosures and contracts are not completed properly, you could be financially vulnerable in the future.

Wasting time with the wrong buyer

So many ‘for sale by owner’ transactions fail because the seller gets into a contract with a buyer that is not qualified to buy their home. Wasting time with the wrong buyer can delay the sale of your home for weeks or even months. There are ways that a seller can protect themselves from this situation. Sellers should ask all buyers to submit a pre-approval letter along with their offer. Many agents will even suggest that a buyer gets pre-approved with their preferred lender to make sure they are properly qualified to get financing.

It is not uncommon for the ‘FSBO’ seller to not require the buyer to submit an ‘earnest-money’ deposit. The ‘earnest-money’ deposit is the initial down-payment that a buyer will make to the escrow. These monies will be held in escrow through the transaction and credited back to the buyer once the transaction is finalized. If for some reason the buyer does not perform pursuant to the terms of the contract, the seller keeps the deposit as “damages”.

Realtors offer value in many ways

As you can see, there are many costs involved in selling a home. There are also many opportunities to make costly mistakes when selling a home on your own. The initial ‘sticker shock’ of an agent’s commission is completely understandable. Once you really understand the costs of selling a home, the value of working with a Realtor becomes more apparent and paying that commission once the home is sold doesn’t seem so shocking.

If you would like more info about the cost of selling your home as a ‘for sale by owner’, or if you would like to meet with an experienced local pro, contact us today!

Call or text: 310-379-4444