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For Sale By Owner Closing Costs: What You Need To Know

Sidney Richardson4-minute read
June 30, 2021

When you sell a house yourself, for sale by owner (FSBO) style, you save the money you would have otherwise spent on a real estate agent or REALTOR’s® assistance – but there are still other costs involved with the sale that you’ll be responsible for.

Let’s break down all the FSBO costs you can expect to pay at closing.

Are There Closing Costs In A For Sale By Owner Real Estate Transaction?

For sale by owner means a house is being sold by a homeowner without the assistance of a listing agent. Selling a home this way eliminates the need for third-party involvement and is a method used most often by sellers looking to maximize their profits by avoiding paying for a real estate agent – which can sometimes cost 5 – 6% (or more) of a house’s final sale price.

When you list a home FSBO, however, there are still other costs you’ll be responsible for – even without a listing agent involved. These fees due at closing are aptly named closing costs. Closing costs include things like your appraisal fee, attorney fees, title insurance, credit report fees, upfront homeowners insurance payments, origination fees and more. Typically, you won’t be able to waive closing costs, and they’ll add up to about 3 – 6% of your home’s purchase price.

So, in short, when you buy or sell a home FSBO, the same closings costs you would typically pay in a normal sale still apply, except for the real estate commission you would have paid for the services of a listing agent.

Who Pays Closing Costs In FSBO Transactions?

Since a FSBO transaction works the same as a regular home sale – minus the real estate agent – deciding who pays closing costs is done the same way as any other home sale. Many fees that make up closing costs are negotiable, so the party responsible for paying might vary with negotiations. Who pays what may also be impacted by the state of the housing market – if it’s a buyer’s market, the buyer has more leverage in negotiations and the opposite is true of a seller’s market.

Overall, the buyer typically pays the majority of the closing costs, though there are some that the seller may cover, too. For instance, even if your seller is selling their house with no listing agent, they may still have to foot the bill for your buyer’s agent, as the seller is usually responsible for the real estate commission fee.

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What Are The Closing Costs In A FSBO Home Sale?

Since a FSBO transaction is almost identical to a regular home sale minus the real estate agent or REALTOR®, you can expect to pay a lot of the same closing costs. Here are a few of those, sorted by who will likely pay them – buyer or seller. 

Buyer Closing Costs

As a buyer, you can typically expect to pay 3 – 6% of your home’s purchase price in closing costs. These fees along with a down payment can often lead to a larger-than-expected payment at the negotiation table, so it’s always a good idea to research what costs you might be responsible for at closing as a home buyer.

As a home buyer, here are just a few things you might pay for when closing on a home:

  • Mortgage application fee
  • Home inspection and/or appraisal fees
  • Attorney fees, if not paid by the seller
  • Credit report fee
  • Loan origination fee
  • Upfront insurance payments
  • Title transfer taxes
  • Money for an escrow account which will be used to pay for property taxes, etc. 

Seller Closing Costs

As a seller, you typically pay less in overall closing costs, but there are still fees you’ll be responsible for. With a FSBO transaction, you can expect to pay for a few additional things as well. Since a real estate agent or REALTOR® isn’t marketing your home, you’ll have to pay for the services they would have done for you, such as an appraisal and marketing your home to buyers.

Here are a few things you can expect to pay as a FSBO seller:

  • Buyer’s agent commission – You will likely still have to cover your buyer’s agent REALTOR® fees even though you didn’t make use of an agent’s help
  • Seller concessions
  • Potentially your seller’s attorney fees
  • Home appraisal and marketing fees that would otherwise be covered by the real estate commission
  • Title insurance policy
  • Title transfer taxes, if not paid for by the buyer
  • Credits toward buyer’s closing costs

How To Calculate FSBO Closing Costs

Closing costs typically run buyers around 3 – 6% of their home’s final purchase price, and sellers can expect to pay up to 10%, since they tend to pay for the real estate commission fees too. Real estate commission or REALTOR® fees can cost an additional 5 – 6%. While not paying for the help of a seller’s agent can save you thousands when selling your home, you do miss out on their help and experience – and you may have to spend that money you saved, anyway, if you end up paying for your buyer’s agent commission and other fees.

If you’re prepared for closing costs, you don’t have to be surprised when you get to the negotiation table. Generally, you should be prepared to save at least 5 – 6% of a home’s selling price to cover any costs that come up at closing. While many costs paid at closing by the seller come out of the home’s purchase price, as a buyer, you’ll want to make sure you have the funds in your savings account to cover it.

If you’re purchasing a home. FSBO or not, with a final sale price of $275,000, be prepared to spend around $16,400 or more on closing costs (6%). As a FSBO seller, you may want to save for closing costs as if you had hired a seller’s agent in the first place, since you may end up paying additional fees at closing regardless.

For more information on what to expect when paying extra fees at closing, read our closing costs guide.

The Bottom Line

Closing costs are never the same across the board, since there is often negotiation involved when selling a home. While you can avoid paying for REALTOR® fees if you choose to sell a home yourself, be aware that you will still have to pay other closing costs just like you would in any other real estate transaction.

For more information on FSBO homes and selling a house yourself without the help of a real estate agent, check out our guide to the paperwork you’ll need to get started.

Sidney Richardson

Sidney Richardson is a professional writer for Rocket Companies in Detroit, Michigan who specializes in real estate, homeownership and personal finance content. She holds a bachelor's degree in journalism with a minor in advertising from Oakland University.