The for sale by owner terminology involves a process in real estate dealings where
the property transaction is done by the buyer and the seller without any middle man. Usually, real estate deals whether outright sales or for rental purposes invariably have the middle man or the real estate agent or broker and it is he or she who swings the deal for a commission payout.
This payout could be either from the seller or from the buyer or from both. The commission structure and terms do vary from country to country and even within countries as the real estate market is not something that is highly regulated in most countries.
In the US, this commission can be as high as 6% of the selling price and that is quite a big amount. People therefore want to avoid incurring this expense and that is where the for sale by owner principle comes into play.
In a for sale by owner transaction, the seller typically makes use of a marketing company to do the marketing of the property and with the help of a lawyer; he ensures that the legal angle is well addressed.
Now we have talked about this arrangement from the sellers perspective. If a particular buyer who has engaged a real estate agent to help him wishes to take the for sale by owner route, the agent may still request the seller to pay him his commission. The seller though is under no obligation to make any commission to him and he has to do with what the buyer would pay him.
As an owner, if you want to take the for sale by owner approach, then you have to be prepared to do everything on your own. The advantages you get by selling your property yourself though is substantial as you get to keep the proceeds and you also get to deal directly with the buyer. There are many buyers who too are interested in taking the for sale by owner approach and therefore it is entirely up to you on how you want to sell your property.
The for sale by owner real estate transaction is definitely a good one if you and the buyer take the time and effort to get acquainted with yourselves with all the legal aspects and are willing to take on the responsibilities that are usually handled by real estate middlemen.