By definition, a “for sale by owner” real estate situation is one where a property is put up for sale without the help of a real estate broker or agent. Sounds like a great opportunity to be independent and cut out the middleman, right? Not quite.


There are tons of horror stories about selling and buying a for sale by owner, or “FSBO” home. Here are a few that stand out …



“When trying to sell my home myself, I was approached by a ‘creative investor’ with an offer to lease my house for five years. The buy-out price he named was well above market, and I would have cash flow of about $500 a month above my mortgage. Who wouldn’t take that deal? But what I didn’t realize by not reading the fine print was that he was able to sublet the property—which he did. I wasn’t prepared for that, and I didn’t like the feeling that I’d lost all control of my home for five years with all my equity tied up in it. Luckily, there was a clause in our contract stating the deal was off if his first payment to me was late, and that happened, so I was able to back out. But I’ve since learned that ‘creative investor’ can be a code word for trouble!”

“I tried to sell my home FSBO, and it was a disaster. First, I was so eager to showcase my home that I hung around during showings, which was a huge turnoff to potential buyers. I thought I was being helpful, pointing out extra storage and other features, but looking back, I realize now that I was just an annoyance. And, I overpriced the house, which is another common FSBO error. I wrongfully assumed that someone would make an offer anyway, and that I need a strong starting point from which to negotiate down. But it just prevented buyers from even considering it. In hindsight, it would have been money well spent to work with an experienced agent.”

“I had a beautiful townhouse listed FSBO, and got it under contract with my own marketing to a veteran. What I didn’t count on was that the veteran’s VA loan would be killed by an inexperienced appraiser who severely undervalued the home and didn’t even use local comparable sales. I didn’t know that with a VA loan, a bad appraisal sticks with the house if another VA buyer should come along—something I’m sure a real estate agent would have known. In the end, I finally worked with an agent who got the property under contract in 14 days with buyers who were using a conventional loan. But lesson learned, I’d never forgo using a real estate agent again!”

And this is not only a problem for sellers, but it can turn off buyers too!

“My husband and I tried to buy a home that was For Sale by Owner, but ran into problems with the commission. Typically home sellers pay the full commission to their listing agent, who then splits it with the buyer’s agent. So by not using a listing agent, these sellers were already saving money. But these sellers were also unwilling to pay our own agent a commission, and expected us to pay it instead! This was an expense we weren’t expecting, so we ended up walking away from the deal. I’m not sure if they ever sold their home.”

Stories via Realtor.


There are countless reasons why FSBO selling is such a high-stakes game, but here are just a few:

Scams are common

We’ve read about cases where buyers put up earnest money for a home they’re interested in, only to learn that it was a scam. There’s also a common scam where “open house attendees” actually go through your property for prescription drugs.


Sellers may be liable

When you’re selling on your own, you may not have insurance that brokers carry, such as errors and omissions insurance, which protects against claims of negligence. So, if you accidentally describe your property’s roof incorrectly, which then leads to issues for the buyer, you may end up being liable for resulting lawsuits.

There’s a lot of paperwork

If you’ve ever bought or sold a house, you know that you spend hours simply signing paperwork. Now, imagine having to prepare all of that paperwork yourself. Daunting? Yep.


FSBOs sell for less $$$

In recent years, FSBOs lost about 16 percent of their sales price with a median selling price of $210,000. Is doing everything yourself really worth losing 16% of your home’s value?


Real estate is one of those things you need to leave to an expert who understands your market, legal issues, and all of the other ins and outs of buying and selling property. Don’t become a for sale by owner cautionary tale!

Work with us and you’ll have full access to a team of real estate pros who know South Central Wisconsin top to bottom, from Baraboo to Verona, and beyond. Contact us today!