Why do homeowners choose FSBO?

Nearly one in four homeowners currently choose to sell their homes without a broker. The reason is obvious.

With real estate commissions as high as seven percent of the selling price the average homeowner takes a beating when listing with a broker. Suppose you’re selling a $150,000 home on which you owe $130,000. You expect to realize $20,000 in equity.

150,000	- selling price
-130,000	- left on mortgage
20,000	- equity

Of course, if you list with a broker who charges six percent commission he'll take it off your selling price, not your equity. You’ll pay $9,000 in commission.

150,000	- selling price
x 0.06	- % commission
9,000	- commission cost

Now your equity is $11,000 and you haven’t even paid your closing costs!

20,000	- initial equity
- 9,000	- realtor's commission
11,000	- net equity

Your realtor just walked away with 45% of your equity. Nice deal, huh?

9,000	- realtor's commission
÷ 20,000	- initial equity
45%	- realtor's percentage of your equity

In the past, the real estate industry very effectively limited access to the home selling market through the MLS. This allowed them to drive commissions up to a very high level. With the emergence of the internet as a ubiquitous medium, though, this real estate monopoly is quickly deteriorating as the public increasingly turns to FSBO sales.

Many people are realizing that selling their own home to save the commission is a very realistic and sensible option. Adding up all the financial costs of selling on your own (i.e. signage, advertising, etc.) is typically less than $1,000, a small fraction of the typical commission fee.

There are many sources of information for selling your home on your own. Visit our FSBO Learning Center resources, review our 4 Steps to FSBO Success, or call a local real estate attorney or title company.


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