FSBO Closing Costs: The Complete Breakdown
Selling your home For Sale By Owner (FSBO) eliminates the listing agent commission, but you still face significant closing costs. Understanding every fee helps you budget accurately and avoid surprises at the closing table.
Common FSBO Closing Costs
Even without an agent, you will encounter these costs:
Typical FSBO Closing Costs
3-5%
of sale price, including buyer's agent commission and standard fees
Title Insurance and Search
Title insurance protects the buyer (and their lender) against title defects. The seller typically pays for the owner's title policy in most states. Cost: $1,000-$3,000 depending on sale price and state.
Escrow and Settlement Fees
An escrow or settlement company handles the closing paperwork and fund transfers. Fees range from $500-$2,000 depending on the complexity and location.
Transfer Taxes
Many states and municipalities charge a transfer tax when property changes hands. Rates vary widely: from 0.1% in some states to over 2% in others. On a $400,000 sale, this can range from $400 to $8,000+.
Buyer's Agent Commission
Most FSBO sellers still offer a buyer's agent commission (2.5-3%) to attract agents who bring qualified buyers. Without this, you dramatically reduce your buyer pool.
Attorney Fees
In some states, a real estate attorney is required at closing. Even where not required, FSBO sellers should strongly consider hiring one for $500-$1,500 to review contracts and handle legal requirements.
Prorated Taxes and HOA
Property taxes and HOA dues are prorated to the closing date. You pay for the portion of the year you owned the home.
How FSBO Compares to Agent-Assisted Sales
The big savings from FSBO come from eliminating the listing agent commission (2.5-3%). On a $400,000 home, that saves $10,000-$12,000. However, NAR data suggests FSBO homes sell for about 6% less than agent-listed homes, which would wipe out the commission savings on many sales.
Strategies to Minimize FSBO Costs
- Shop title companies: Prices vary significantly between providers
- Negotiate buyer's agent commission: Consider offering 2.5% instead of 3%
- Use a flat-fee attorney: For basic closings, a flat-fee arrangement saves over hourly billing
- Understand your transfer tax: Some states allow negotiation of who pays
The Bottom Line
FSBO closing costs typically run 3-5% of the sale price, saving you the 2.5-3% listing agent commission. Whether the total savings justify the additional work depends on your market, your experience, and how much time you can invest.