The acronym FSBO stands for “For Sale By Owner” and defines a property owner that is selling a home without a real estate agent. Real estate agents charge a commission to sell real estate, an amount that is negotiated between the agent and the property owner.

This commission will vary but a common percentage is five or six percent of the sales price. On a $300,000 property, a six percent commission equals $18,000.  A seller who elects to market their property without an agent wants to save $18,000 and go pure FSBO. Should you?

At first glance, the response might be, “Sure, who wouldn’t want to save $18,000?” And that makes complete sense. But you need to do a bit more research on what a real estate agent actually does before you make any type of FSBO decision. The primary advantage of using a real estate agent is marketing.

A real estate agent subscribes to the local multiple listing service, or MLS. When a property is uploaded into the MLS, it is immediately introduced to the widest market possible. While you might be able to post a For Sale sign in your yard or window and put your home on a website, that’s a pale comparison to the MLS. When you visit a real estate agent’s website and see the homes listed for sale, those listings are typically pulled from the MLS.

An agent will tell you what the property will likely sell for in the current market and how long it will take to sell the home. Your property is in direct competition with other homes in the area and you need to be properly priced. Say that you listed your home for $275,000 and you got an offer that very same day. Do you think you might have priced your home too low? An agent can compare recent home sales and price your property accordingly. If you sold your home for $275,000 and it was really worth $300,000, how much money did you lose? That’s right; $25,000.

In fact, it’s not unheard of for a seller to increase an agent’s commission. Why would a seller be willing to do that? To get more showings. A buyer’s agent is typically paid half of the sales commission if the agent brings a qualified buyer and a contract. If the seller agrees to pay a higher commission, then the house will be shown to more buyers, again increasing your potential pool of buyers.

An agent will stage your home, hold open houses, negotiate your sales contract and work to get your very best price. But perhaps the single most important advantage of using an agent is getting the highest price for your property in the time frame you require. An agent saves you money; it’s not the other way around.