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Welcome to the brave new world of FSBO (pronounced fiz-boh), an acronym for "for sale by owner" and the shorthand way to refer to houses that sellers market themselves. With home prices expected to fall this year and next, more sellers are going the FSBO route. Their goal: to keep a bigger share of the proceeds from a sale by forgoing the services of a listing broker and saving the 3% commission she'd likely charge (when you do a FSBO, you typically still have to pay a 3% commission to the buyer's broker). Last year about 20% of sellers unloaded their homes without an agent, up from 12% in 2005, reports industry newsletter Real Trends. And that's expected to rise again next year. MONEY asked homeowners who did it--and experts who serve them--how to do a successful FSBO. Their advice: 1. Plan for a major time-suck. 2. Don't get greedy. 3. List it right. 4. Spiff up the place. 5. Don't skimp on a lawyer. 6. Make them show you the money.

Copyright (c) 2007 Time Inc. All rights reserved. No part of this material may be duplicated or redisseminated without permission.

Be your own broker when you sell your house and you could save thousands. Here's what it takes.

THE LAST TIME SABRINA WILLIAMS sold a home herself, she received a solid offer the first week, got her asking price of $319,000 and saved nearly $9,000 in broker fees in the process. Snap, just like that. So when Williams, 32, a pharmaceutical company manager, and her husband Michael Cunningham, 37, an IT consultant, recently decided to sell the three-bedroom townhouse they own in Germantown, Md., she figured she knew just what they had to do to find a suitable buyer. "We'd fluff up the towels, clean the carpets and buy a new chandelier," she says. "And in return we'd save thousands."

But while that simple approach worked well when the couple sold their first home in 2004, that was then (then being one of the hottest real estate markets in decades) and this is now (when inventories of unsold homes are at their highest levels in nearly 15 years). In the two months since they put their townhouse on the market, Williams and Cunningham haven't gotten even one bid from a prospective buyer, and they're already beginning to consider other options. "We can always knock down the price," Williams says. Or maybe, she muses, they'll postpone selling until spring: "It's not like we're in a hurry."

Welcome to the brave new world of FSBO (pronounced fiz-boh), an acronym for "for sale by owner" and the shorthand way to refer to houses that sellers market themselves. With home prices expected to fall this year and next, more sellers are going the FSBO route. Their goal: to keep a bigger share of the proceeds from a sale by forgoing the services of a listing broker and saving the 3% commission she'd likely charge (when you do a FSBO, you typically still have to pay a 3% commission to the buyer's broker). Last year about 20% of sellers unloaded their homes without an agent, up from 12% in 2005, reports industry newsletter Real Trends. And that's expected to rise again next year.

But even in the best of times, many homeowners who start out doing a FSBO eventually enlist the aid of a broker. Some get fed up with around-the-clock phone calls and the stream of nosy strangers. Others aren't sure how to price their house, show it to best advantage or deal with the legal ins and outs. And in tougher real estate markets like this one, those challenges only get, well, tougher.

Luckily, as interest in FSBOs has grown, so has the number of businesses that serve them. "There are plenty of places where you can go for guidance," says Steve Ozonian, chairman of Help-U-Sell, which has 800 franchises offering such services as staging (getting your home ready to show) and help with the closing. As long as you're willing to show the place, you can pay a few experts here and there and still wind up saving a big chunk. You probably won't spend much more than $1,600 (see the box at left).

MONEY asked homeowners who did it--and experts who serve them--how to do a successful FSBO. Their advice:

> PLAN FOR A MAJOR TIME-SUCK
You probably expect you'll have to block out Sunday afternoons to show your place. But it's worse than that--much worse. You also have to be ready to show it at any time, even during work hours. (Hope you have an understanding boss.) And you'll need time to conduct negotiations and make repairs that buyers demand. "It helps to be handy," says college professor Bruce Weinberg, 48, who repainted the kitchen of his suburban Boston house in one night last year while his family slept. He sold the house in six weeks for $850,000, saving an estimated $21,000 in commissions. "You can only get through it by focusing on the savings."

> DON'T GET GREEDY
Many first-time FSBOs come up with an unrealistic listing price based "on whatever amount of money they need" to afford the next house, says Laura Dee Mytinger, an agent in Kansas City, Mo. Instead, base the price on what similar houses in your area sell for. You can get up-to-date sale prices by visiting your county records office. Or hire a professional appraiser. Typical fee: $300. (Look for one at eppraisal.com.)

> LIST IT RIGHT
Sticking a FOR SALE sign on your lawn isn't enough. Because 80% of home buyers start their search online, you have to get your house entered in the multiple-listing service, a central repository where all the brokers in a given geographic area share listings. The MLS feeds other sites for house hunters. You can find a licensed real estate agent to list your place on FlatFeeMLSListing.com. Doing that will run you $250 to $400. And post a notice at craigslist.com; it's free.

> SPIFF UP THE PLACE
Cluttered, poorly laid-out rooms can make your house look smaller than it is. And size equals money. If you're clueless about home design, recruit a stager to create a plan for making the house look more appealing. Cost: about $300. (Find an accredited pro at stagedhomes.com.) For a few thousand more, stagers will execute their tips--replacing draperies or painting over the color scheme you stole from Taco Bell.

You can DIY by watching home-staging shows such as HGTV's Designed to Sell, suggest Dave and Erin Kaegebein. The couple, who sold their Aurora, Ill. house in six weeks last year, attribute the healthy price they got--$204,500--to advice from such programs. Among their tips: Use neutral wall colors and clear out closets to make them look bigger.

> DON'T SKIMP ON A LAWYER
An experienced real estate attorney can tell you what flaws you're legally required to share with buyers (that slab leak, for example) and what you can let them discover for themselves (those noisy neighbors). He can also help you negotiate the final deal and draw up closing documents. Expect to spend at least $500. To find a lawyer, get referrals from friends who have recently sold a home--without problems--or go to realestatelawyers.com and plug in your zip code.

> MAKE 'EM SHOW YOU THE MONEY
Ask buyers to include with their offer a letter from a lender confirming that they can afford the mortgage required. And don't take your house off the market until you get a good-faith deposit of at least $1,000.

Above all, stay patient. As Williams says, that may be easier to do if you remind yourself how much you're saving in commissions. She notes, "Even if we do have to reduce our price, I'm confident by selling the house ourselves, we'll make a better profit on the deal."

[BOX]

DOING THE MATH

Here's how the numbers typically break down for a FSBO house that sells for $220,000, the median price in the U.S. last year. We're assuming a basic level of help from outside experts; if you want more assistance, your costs will rise.

YOUR COSTS:

Listing... $400
Staging... $500
Legal fees... $700
Total... $1,600

YOUR SAVINGS:

$6,600
(3% of $220,000)

NET SAVINGS:

$5,000

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HOW WE DID IT

Advice from FSBO veterans

Pack away photos and other personal items

"When people buy your house, they are really buying the dream of seeing themselves happy in it. If people see your stuff lying around, they imagine you in the house."
--Michael Cunningham and Sabrina Williams, Germantown, Md.

Don't advertise that you are the one living there

"After our first showing, we took the fact that we were the owners off every handout and off the Internet. That made people more willing to share honest feedback about the house. If we heard certain complaints over and over, we were able to address them."
--Amy Ebersole and Bruce Weinberg, Newton, Mass.

Reach out to every buyer

"When people nearby had open houses, we'd go by and memorize names from the sign-in sheet. Then we'd call those prospects and ask them to look at our house. You have to be clever in your marketing. You can't just put out a sign and wait."
--Tracy and Chris Csontos, Parkville, Md.

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SHOULD YOU TRY A FSBO?

Before you decide to sell your home on your own, you'd better be able to give these questions a definite yes

1
Can you stay objective?
If you can't bear to hear strangers muttering that your kitchen requires updating, that your family artwork needs deep-sixing and that the chimney-pointing job you did is second rate, selling your home yourself is not for you. You can't let your emotional ties to the house deter you from recognizing a serious buyer.

2
Are you up to the hassle?
Between contracts, disclosure requirements and addenda, doing the deal requires more documentation than the average Middle East cease-fire agreement. And negotiations call for close listening and measured responses. If all that would fray your nerves, stick with a broker.

3
Do you have the time?
Prospective buyers like to view houses at inconvenient times (like during your workday or weekend golf game). Then there are the open houses you'll need to hold and listings you must write and update. Count on devoting at least 10 hours a week to FSBO tasks while your house is on the market.

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Putting up a good facade 60
Cures for a cramped kitchen by Josh Garskof 63
How to bond with your real estate agent 65