Blog Education 3 Reasons Why Most FSBOs Fail

3 Reasons Why Most FSBOs Fail

By Melissa Dorman, October 18, 2018

Do you really save money by cutting out the commissions?

In the age of Zillow and Redfin, who really needs an agent anyways. After all, it can’t be that hard to take photos and put a sign in the yard. We can save ourselves 6 percent in commissions if we just market the home ourselves. 

Most of us have heard the mythical reasons that FSBOs attempt to sell their home without an agent. Very few are successful and many fail and learn how tough it is to sell a home for market value. For many, the sale of their home is their largest transaction. It’s like calling up your surgeon and saying “Hey, I appreciate the consult but I was thinking I would do the surgery myself. You know, to save on the costs.”

Still, a 2017 study showed that about 36 percent of FSBOs try to sell their homes without an agent. Interestingly enough, many hit roadblocks and eventually hire an agent. Of all the FSBO attempts, only 11 percent of sellers successfully complete the transaction.

Why sell your largest asset without the guidance of a professional?

Diving deeper, Zillow research that without an agent, sellers think they will

  • Save money (57%)
  • Save time (36%)
  • Know their home better than any agent could (27%)

Let’s look into the reasons by FSBO’s fail on their own.



How would you feel if you got a low ball offer on your home? Many FBSO’s have a hard time separating their emotion from the transaction. They are easily insulted by buyers offers. Having an agent, creates a barrier between the buyer and seller, which allows for objectivity in reviewing offers that come in. Agents can use feedback from buyers constructively, while hearing your home smells bad, puts the seller directly the line of fire. Many brokers know that going up against a FSBO is often a great way to get a buyer client a good deal.



Many sellers are so focused on saving money on the commissions, they do not factor in the cost of legal liability they are taking on by representing themselves. We are all humans and we all make mistakes… One slip up on the advertising, such as stating “wood floors” when in actuality the floors are wood veneer, could be a very costly mistake.  More than likely, the seller would be responsible for paying the difference, or worse, for replacing all the flooring to hard wood. So much for saving on commissions!

As brokers, we have errors and omissions insurance to cover our mistakes. And given our experience, we are less likely to make them in the first place. In a litigious society, more than 6% can easily fill the pockets of a persuasive attorney.



Perhaps the greatest reason of all to list with a professional is that your home will sell for more! A 2017 National Association of REALTORS® Profile of Home Buyers and Sellers uncovered that 8% of sellers were FSBOs. The typical FSBO home sold for $190,000, while the same type of home listed with a broker sold for $249,000!

Furthermore, another 2017 study released by automation valuation model (AVM) found that homes sold by REALTORS® and homes sold by owners netted the same amount. The difference was the seller had to do all the work and have all the headaches.



Melissa Dorman is a Licensed Broker with Yascha Group at Living Room Realty in Portland, OR. Follow Yascha Group  on Facebook.

Melissa Dorman

Broker | OR & WA


Ten years ago, Melissa was living in a slum in Kolkata, India, helping over 200 women escape sex trafficking by providing alternative work at a social business. It was there she discovered her passion for financial education as a means of empowering people to move out of poverty. After graduating from UCLA with a Masters, Melissa spent 5 years working as a Social Worker; assisting clients facing homelessness, in jail, or at a psychiatric facility. As much as she loved the work, imagining saving for retirement on the meager salary of a social worker was becoming grim. That's when Melissa discovered "passive income." In no time, she fell in LOVE with real estate as a vehicle for wealth. Soon after, Melissa began locating off-market multi-family properties to purchase through creative financing strategies and win-win opportunities. Two years into investing, Melissa quit her day job as a Social Worker to become a full-time broker and investor. Initially, she was drawn to people in difficult circumstances, so she developed extensive experience assisting families facing foreclosure, short sales, and probate. Melissa is well versed in helping her clients overcome complex real estate challenges. Currently, Melissa is teamed up with Super Broker, Yascha Noonberg at Living Room Realty. Together they assist clients to achieve their real estate dreams, including how to strategically buy and sell a personal residence to maximize profits. Far from the slums of Kolkata, her greatest passion now is empowering other working professionals to develop passive forms of income through buying multi-family properties in Portland.
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