For Sale By Owner Conversation - Thoughts For San Antonio Sellers

Real Estate Agent with Kimberly Howell Properties (210) 646-HOME

For Sale By Owner Sign of Casey Serin

photo courtesy of Casey Serin

For Sale By Owner - Is it a good thing?

I recently spoke with an online friend of mine at Twitter and learned they were selling their house as a "For Sale By Owner" (or FSBO as they are often called in real estate circles).  I didn't know they were selling their home, but we had spoken a bit about their future purchase.  I learned that they were selling it as a FSBO only after a tweet caught my attention.

It seems a buyer's agent had stopped by their house and knocked on their door.  The agent had an interested buyer and wanted to know if they'd be willing to pay the agent 3% as a commission.  Based on what my friend said, it sounded like the agent demanded they pay it more than asked if they would.  Of course, this alarmed me a bit as I hate to see any sort of high pressure sales and know that many Realtors® have a certain disdain for "For Sale By Owner" properties.

No one should be totally surprised that agents don't like "For Sale By Owner" signs.  Why should we like them?  Much like McDonald's probably hates when you have a backyard BBQ, agents are out there to be in business of helping people buy and sell real estate.  If everyone went the route of "For Sale By Owner," we'd be out looking for new careers.


Of course, the idea behind a "For Sale By Owner" is control and money.  Not having to pay a commission to a listing agent and being able to run the sale "your way" are the key factors in why people choose to sell by themselves.  Perhaps someone had a bad experience with a Realtor®.  Perhaps they know a bit about real estate themselves.  Whatever the reason, there will always be people who choose to go it alone.

The control issue is obvious.  We as agents do like to tell you what to do.  We ask you to clean up, we have you rearrange some furniture, we suggest prices, and give advice on the offers that are made.  That's what you pay us to do.  In the end, we sell your home and collect our commission (and pay the buyer's agent's commission out of that).

Commissions are probably the biggest issue to a "For Sale By Owner" - saving money is the name of the game.  By eliminating the commissions, the seller is in control of all the proceeds to their home.  Everyone likes to save money and make more of it.  Who can blame someone for that?

Why not FSBO?

Of course, there is always another side to the story.  Your average "For Sale By Owner" will see this in a different light, but I think there are some important disadvantages to selling a home on your own.

Access - Do you know who's coming and going in your home?  You definitely should.  Being present for all showings might solve this problem, but of course, it also presents some other issues (most buyers are uncomfortable with a seller hanging around).  Here in San Antonio, we use Centralized Showing Service to schedule showings (so we have a record of who's been in and out) as well as Suprakey Lockboxes (which keep records as well).  By utilizing these two items, we know who's been in your home in case there's any problems.  These two items also give you the freedom of not having to be there for every showing.

Trying to schedule showings yourself?  Of course you can do this.  What I have learned though is that if you're not available when the buyer is ready to look, they will often move on and go look elsewhere.  It happens to us as agents as well.  If a buyer calls us and wants to go now, but we're not available, they will often call another agent and see if they're available (of course, if they are our clients, we make the time and schedule it).  One missed phone call or denied showing can cost you the sale of your home (and that applies to "For Sale By Owner" and agent-based sales).

Price - This one concerns me the most as I fear many FSBOs under- or over-value their homes.  Since Texas is a non-disclosure state, sales data is not public.  This is what we base our comparative market analysis on as agents.  We have access to the sales data, but the public does not.  Many sellers will use sites like Trulia and Zillow to do their own market analysis, but these sites do not show a true picture of what's happening in your neighborhood.  I am not against these sites at all.  I use them all the time.  What I am against is using them as the final word in real estate.  Both function as great starting points.

When a buyer sees your "For Sale By Owner" signs, a certain mentality takes over as well.  The buyer knows that fair market value also includes the cost of commissions, so in their minds, they can discount your list price by the cost of a commission.  They see you as a "deal."  In doing so, they might even slash the price (in their offer) by more than the cost of a commission - effectively reducing the amount of money you might have made on the sale of your home.  You don't have to take their offer, of course, but the fact remains that the buyers out there are looking for a deal.

The exact opposite can happen as well - the FSBO seller can over-value their home.  Agents do it too (it drives some of us nuts when we see agents doing it).  When a home is listed too high, it often languishes on the market.  Time spent on the market drives up the cost of the sale.  Every time you make another mortgage payment, you are lessening the value of the sale.  Mortgage interest is not recaptured upon sale, only principal reductions are.  If you've been in the home a short time and are still paying the weight of your monthly as interest, then you are not getting much value out of each payment.

Exposure - "For Sale By Owners" used to get little more than a sign in their front yard for exposure.  Times are different now and the internet has helped level that playing field.  FSBOs now have access to many of the same tools that we have, in some cases, even the local MLS.  This is the hardest argument to make to a seller who wishes to go it alone.  If you are doing it yourself, do yourself a favor and get on your local MLS - as much as I dislike the loopholes that allow a "For Sale By Owner" access to an MLS that my dues pay for (and I pay heavily for), they do exist.  Being on the MLS is a huge benefit.  Not only does it get you searchable within our system; it gets you on and allows you to be shown on thousands of individual agents' websites through the power of IDX.

Exposure isn't just about slapping some photos on a website though.  Many of us practice SEO (Search Engine Optimization) techniques on a daily basis in order to get our listings and sites to be ranked higher up in the search engines (such as Google).  By working at it everyday we're able to get more exposure than a website that was thrown together and forgotten.  Agents also talk about their listings to other agents all the time - sometimes word of mouth is better than anything else.

The legal stuff - Let's face it, selling your home is a legal process.  The forms we use are written by lawyers for a reason - to protect the parties involved and give them legal remedies should a problem arise.  Although the One To Four Family Residential Contract Realtors® use here in Texas is pretty simple to fill out, it's the words that we don't write that matter most.  The wording has been tested in the court of law over and over again and refined (we often get updates on the forms several times throughout a year).

The Texas Real Estate Commission maintains the Real Estate Recovery Trust Account (FAQ - pdf file) for consumer's protection when a real estate transaction comes down to lawsuits.  Every real estate licensee pays into this fund and when we are sued, the fund is there to take care of the costs of the judgment.  If you are selling your home as a "For Sale By Owner," guess who's responsible for paying the judgment if you lose the case?  That's right - you, the seller.  Real estate agents also carry E&O insurance (Errors and Omissions Insurance) that helps protect us in the event of judgments.  We're covering your legal bases and ours.  You're covering all of them on your own.  Imagine trying to save a few thousand dollars and suddenly you're paying out a judgment of tens (or hundreds) of thousands.

This part probably worries the most when it comes to "For Sale By Owners."  Most people only see the easy part of filling out that form - and believe me, if you know what you're doing, writing a contract is easy.  One mistake however, could cost a lot of money.

What about the "For Sale By Owner" brokerages?

There are brokerages out there that for a flat fee or discount fee will get you set up in the MLS, do some basic advertising, etc. on your behalf, but you are still considered to be selling the home yourself.  I have never worked for one of these brokerages, but from what I have seen the fee they charge and what you get are not proportionate.  Most of what they do, you could truly do yourself and if you are going to go "For Sale By Owner" I'd say go it alone without the help of these companies.

What I don't like (personally) about these companies is that I don't feel they are doing right by their clients.  In Texas, when we begin an agent-client relationship, we have certain duties to you (as well as you to us) and when we're a Realtor®, we have a Code Of Ethics that we adhere to as well.  By not fully representing the "For Sale By Owner" seller, I feel they are short changing you and not performing the duties that we as agents should adhere to (regardless of our status as a Realtor® vs. a real estate agent).

I know people who have had great experiences with these companies of course, so this is simply my opinion.  I know I had thought about selling my personal home as a FSBO before I became a Realtor®.  I wound up not doing it and after learning more about real estate and becoming an agent, I know I would never consider it again.  In fact, when I do sell my home here in San Antonio, I will probably have another agent list it, as I don't ever do double-siding (representing both seller (me in this case) and buyer) and I'd prefer not to put myself in any sort of conflict-of-interest position.


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Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale


I have talked to several people who were selling their own homes. Avoiding all or part of the commission payment was the main driver. I understand the desire to hold expenses down, but some sellers believe they are saving by trying to sell their house themselves. But they fail to include on the expense side, their time. They can save 100% of the commission, but if they house does not sell, they have not achieved their objective. One of the great proverbs from old is "You get what you pay for, or You don't get what you don't pay for."

Oct 25, 2009 12:58 PM #1
Kathleen Cooper
Kathleen Cooper, Sposato Realty Group - Worcester, MA
Sposato Realty Group - Broker Owner

Very good points.  Looks like there are way more reasons against going FSBO than for it!  Hopefully the sellers will listen to reason.



Oct 25, 2009 03:21 PM #2
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Wayne - I've seen people do it quite successfully, but at the same time, it does require an investment of time.  I think one of the big things people don't think through is the time required for appointments.  If they have to be there or take all the calls themselves, that alone can be time consuming and aggravating.  We all know things get canceled as well - imagine rushing home to make that appointment for the agent/client who cancels at the last minute.  The Suprakey Lockbox is one of the best inventions.

Kathleen - Interestingly enough, I would never try to sway someone to cancel their FSBO and list with me.  My theory is that if they have their heart set on it, they're going to have to try it and see how it works for them before they ever change their minds.  I don't know how agents work for sale by owners like they do - I just couldn't do it personally.

Oct 25, 2009 10:46 PM #3
Jason Holmes
ERA Advantage Realty - Logan, UT
Local Real Estate Professional


Thank you for your new blog post.  I really appreciate and agree with your views.  I often get frustrated with the do-it-yourself MLS listings.  Recently I had a neighbor across the street list/sell their house with one of these discount brokerages.  I had offered to list and market her house prior to her lisitng, but she told me she didn't want to pay full commissions.  I was suprised to see her listing sell, but it happens.  Maybe next time she won't be as lucky.

Oct 28, 2009 09:15 AM #4
Mike Mayer
Mike Mayer, Broker/Owner - i List For Less Realty, LLC - Lafayette, LA

Good blog and post on this subject. Came across it in the archives!

Sep 15, 2010 05:31 PM #5
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