How For Sale by Owner Is Changing in Texas

The real estate market has undergone many changes in the past few years. Areas like the DFW metroplex have seen a 25.9% increase in home prices over the past three years, and inventory is still recovering from earlier in the decade. Investors of all types have seen down payment changes that make buying homes more affordable and, conversely, FHA mortgage restrictions that add a costly extension to flip timelines.

One of the biggest changes that rocked the real estate market was an NAR settlement requiring agents and sellers to set out commission fees more clearly from the outset. As a recent development, the details of that decision are still being market-tested. But with all these turbulent changes, it’s time for sellers, investors, and homeowners interested in FSBOs to take stock of the situation and get what they need to sell their homes. 

Whether you’re interested in listing your home independently or navigating a marketplace with many FSBOs, you benefit from knowing how the process has changed. Discover what both buyers and sellers like and dislike about FSBOs and how the selling process uses digital tools to smooth out the rough edges of managing a transaction alone.

Both Buyers and Sellers See FSBOs as a Way to Save Money

It’s important to see the strategic advantage of FSBOs for both sides of the deal. Buyers often see lower final sales prices, and there are two reasons for this: 

• National and state home price averages include multi-million-dollar homes and transactions that require complex processes like jumbo mechanisms—transactions that are naturally more likely to be agent-assisted deals than FSBOs. In many markets, FSBOs are more common among conventionally sized and priced single-family homes. Such high-priced property skews the average.
• Buyers and sellers have more room to negotiate because a listing agent’s commission doesn’t need to be accounted for. On a $400,000 home, the price can go down by $12,000 (or 3%) without hurting the seller’s pocket at all.

Related: What to Know About For Sale By Owner Fees

However, that price reduction isn’t a zero-sum game; sellers also prosper. They don’t have to pay a 3% commission, and they get to decide which “extras”—expenses like photos, marketing efforts, signs, and so on—are part of their selling strategy. Sellers manage the fees, contract elements, and timeline, giving them more control over the negotiations and final sales price.

The Biggest Change Facing Both Buyers and Sellers in 2024: The NAR Settlement

The rules surrounding FSBOs didn’t see many changes in 2024, but the context around them changed due to new rules facing realtors. Conventionally, both listing and buyer agent commissions were added to the selling price, but recent legal action determined that this was artificially inflating prices and putting a burden on the market. It also made commission percentages too standardized and inflexible.

Today, agents must individually establish their commissions for different properties, and they can no longer advertise the buyer commission rate on a listing page. Listing agents have conversations with their sellers about covering some, all, or none of the buyer agent’s commission. 

At the same time, buyer agents have conversations about who has to pay if the seller doesn’t agree to the typical 3% rate. What this boils down to for the typical buyer is that agent commissions are messy and complex to deal with—and as a result, FSBOs are likely to become more attractive. 

3 Challenges Buyers Face While Navigating an FSBO

A For Sale by Owner arrangement typically impacts the seller’s process and experience far more than it does prospective buyers. As a buyer, you may need to navigate these challenges:

1. Some FSBOs will not be listed on the MLS—the Multiple Listing Service that realtors and major real estate sites use to get information about new houses on the market. You may need to explore non-standard real estate sites or stay vigilant for “For Sale” signs in your desired neighborhoods.
2. Some buyers’ agents may not prefer FSBOs. These properties often present more work on the agent’s end as they take on some of the paperwork and logistics that a listing agent would otherwise oversee. In addition, FSBO sellers may offer less than the standard 3% for their commission. While real estate agents should act in their buyers’ best interests, these factors can affect the property search and negotiation processes.
3. Not all FSBO sellers have experience. Some are selling their homes for the first time or don’t have pricing and selling tools to help them manage the process. As a result, the property may have an inflated price, or negotiations may be hard to manage.

How Buyers Can Successfully Purchase an FSBO

With today’s market and resources, navigating all of these potential challenges is possible. Because FSBOs are becoming increasingly mainstream, many realtors are more willing to help buyers find one.

Related: Flat-Fee MLS Services: A Gimmick or A Gold Mine? What to Know

As a buyer, you have access to more digital resources than in previous years. You can easily search FSBO listings across traditional and non-traditional sites or by simple word of mouth. If you want to purchase an FSBO, or at least remain open to the possibility, let your agent know and do a little searching on your own so you can scoop up a great find.

5 Challenges Sellers Should Consider Before Selling Their Home as an FSBO

As a seller, managing an FSBO deal can be simultaneously rewarding and a little stressful. The marketing, pricing, showing, and negotiating elements all fall on your shoulders, as does making sure everything proceeds to closing day correctly. Some of the biggest challenges you’ll encounter include the following:

1. Knowing how to price your property: There’s an old adage that your house is worth whatever someone is willing to pay for it—and in Texas’s red-hot housing market, people are willing to pay a lot for the right location or property with sought-after amenities. However, it’s important to start with the right price. If you list your property too low, you’re leaving money on the table. But if your price is too high, your property might languish on the market, falling lower and lower in the search results until you have to decrease the price to get attention.
2. Putting your listing up on the MLS: Generally, only licensed real estate agents have access to the MLS. This database houses histories and listing details for every property on the market. Agents use it to find properties for their buyers, and the database pushes out property details to Realtor.com, Trulia, and other major real estate sites. Without an active MLS listing, your property won’t be very visible to prospective buyers.
3. Managing showings and open houses: In a traditional transaction, your listing agent would put a Supra on your door, manage scheduled showings, and run an open house or two for your property. Without an agent, you get to choose if you have open houses or just allow showings—but you also have to manage everything on your own.
4. Staying in control of the contract process: In Texas, real estate agents must use standardized TREC contracts. But in an FSBO arrangement, you can create your own contract or use a TREC contact if you prefer. While this freedom can be empowering, experience or expertise helps when managing contracts. This is vital for ensuring the buyer doesn’t get perks you didn’t mean to agree to. You may even need a lawyer to review all the paperwork, and that can be costly.
5. Managing title requirements: During the period between accepting an offer and the deal closing, a title agency will need to review the title and deed history of the property. This stage ensures that the property is yours and that you have the right to sell it. It also establishes that the buyer will become the owner, free and clear. Buyers and sellers generally agree to particular terms during negotiations, including choosing the title agency and splitting the fees for such services.

How to Make the FSBO Process Better: 5 Best Practices for Sellers

The option to sell your home as an FSBO is a valuable, flexible option—but it’s also full of potential pitfalls. Just like any process that puts you in the driver’s seat, you both get to and have to manage all the details. But with the right tools and preparations, all of the challenges listed above are really opportunities. With that in mind, take the time to consider the strategies you can use for each one: 

• Knowing how to price your property: Conventionally, only listing agents and full-time investors had access to MLS listing data that could help you strategically determine your listing price. But today’s online marketplace offers a wide array of pricing tools—AI and ML algorithms have only improved them. You can use a simple online service to get pricing recommendations based on your address, recent market activity in your neighborhood, and the types of improvements and features on your property. Advanced calculators even let you toggle the price recommendation based on your timeline or other contract requirements like a leaseback.
• Putting your listing up on the MLS: Get your property on the MLS with a flat-fee listing service. This is one of the biggest tactics for any seller. While real estate agents conventionally had exclusive access to the MLS, that’s not the case in today’s market. You can create your listing by describing the property, putting your list price, and uploading photographs of the property. A service with access will ensure everything is properly uploaded onto the MLS. Providers charge different fees for additional services, so you can further fine-tune and control your approach.

• Managing showings and open houses: Serious prospects will want to see your home in person. Listings agents typically manage this process by advertising an open house or coordinating with buyers’ agents to let people into your home during specific timeframes. But you can coordinate everything yourself. You can buy or rent open-house signs, get access to specialized software to coordinate showings, and make sure only authorized buyers and agents come into your home throughout the process. 
• Staying in control of the contract process: Depending on the market, you might receive multiple offers or have a lengthy negotiation with a single buyer. Contract management software can help you keep all the details straight. For example, in a multiple-offer situation, you can organize the pros and cons of each offer to see the “true” price after all the closing costs and seller credits. If you’re going back and forth with a final buyer, software also helps with version control and ensuring finalized negotiation points stay final. You won’t have to worry about signing the wrong version or old terms accidentally wandering into the executed offer.
• Managing title requirements: Pick a title company you trust. Title work has to be hands-off, even in an FSBO, because it can only be done by licensed and certified professionals. But you can retain some degree of control over the process by choosing a title company you trust. Look for companies that offer relatively low fees, have a simple and reliable process, and maintain a proven record of handling everything on time.

Incorporating today’s digital tools and resources into your FSBO strategy can make it much simpler—and more profitable—to manage the deal without an agent.

For Sale by Owner Is Changing—Make Sure You Have the Resources to Succeed

Texas’s real estate market is always evolving, but sometimes enough changes pile up that it’s time to review everything you know about selling homes and getting the right price. At ListingSpark, we provide sellers and investors with informational resources, smart pricing tools, and flat-fee MLS listing services so you can stay on top of market changes, negotiate with more expertise, and benefit from more efficient sales processes. ListingSpark’s flat-fee, full-service platform gives you access to real estate tools and professional expertise, so the FSBO journey isn’t entirely on your shoulders. Contact us today to see what you can list your home for and start getting it ready for the market.