Most home sellers work with real estate agents to list and market their properties and negotiate with buyers. But some sellers skip hiring an agent and list their homes "for sale by owner," or FSBO (pronounced "fizbo").

Buying a home for sale by owner means you, or you and your agent, will deal with the homeowner directly rather than through a listing agent who represents the property owner.

About 10% of homes sold between July 2021 and June 2022 were FSBO sales, according to a National Association of Realtors 2022 survey.

» MORE: For sale by owner: How to sell your own home

Pros and cons of buying FSBO homes

Pros

• Including FSBO properties in your search will increase the odds of finding a suitable home, a considerable plus in today's tight market in which buyers far outnumber homes for sale.

• You could get a bargain. The median sale price for FSBO homes was $225,000, compared with $345,000 for homes sold with an agent's help, according to the NAR's survey.

Cons

• A FSBO seller might be reluctant to pay your agent's commission.

• FSBO sellers may not have any real estate expertise, which could put more burden on you and your agent to make sure everything is done correctly.

Working with a buyer's agent to purchase a FSBO home

You can still have your own agent when buying a FSBO home. A buyer's agent guides you through the homebuying process, from finding suitable properties in your price range to negotiating on your behalf with sellers to closing. Besides handling technical details, an agent can also provide some healthy perspective about the local market.

As the buyer, you usually don't have to pay for an agent's services. Traditionally, the seller pays the real estate agent commission, which is typically 5% to 6% of the sale price of the home. Then, the commission is divided between the listing agent and the buyer's agent and their respective brokerages.

FSBO sellers don't pay for a listing agent, but it's generally expected that they'll pay the buyer's agent commission. However, some FSBO sellers may be unaware of this commission or balk at paying it.

Your agent will verify payment with a FSBO seller at the start. If the seller isn't willing to pick up the tab, then you may need to pay the agent's commission to buy the home.

Buying a FSBO home on your own

You can buy a home without a real estate agent and deal directly with a seller — as long as you haven't signed an agreement with a buyer's agent.

But unless you're well versed in real estate contract terms, contingencies, disclosure requirements and the myriad other technicalities of a real estate transaction, it's a good idea to have an agent in your corner.

A home could be the biggest purchase you ever make, and you'll be dealing with a seller who may not have any real estate experience. It's critical that things are done correctly.

Here are some of the homebuying steps you'll need to handle if you choose not to hire an agent:

• Check the prices of recent comparable home sales to evaluate the asking price.

• Contact the seller directly to see the home.

• Decide how much you're willing to pay and what contingencies to include in an offer.

• Prepare a written offer, and negotiate with the seller.

• Hire a home inspector to evaluate the home's condition.

• Make sure the purchase agreement is drawn up correctly.

You may be required to hire a real estate attorney, depending on state law. But it's a good idea anyway when working without an agent.

» MORE: How to make an offer on a house

Where to find FSBO homes

You can find FSBO listings on general websites, such as Zillow and Trulia, which are part of Zillow Group, and on websites specializing in FSBO listings, such as FSBO.com and ForSaleByOwner.com. FSBO.com is owned by FSBO Inc., an online advertising service, and ForSaleByOwner.com is owned by Rocket Cos., which also owns Rocket Mortgage and Rocket Homes.

FSBO homes aren't always on the multiple listing service, or MLS, the main platform that real estate professionals use to list and find properties for sale for their clients. There are services that will place FSBO listings on the MLS for a fee, but many FSBO sellers post listings elsewhere for free.

Before house hunting, get preapproved for a mortgage

The homebuying process and basic requirements to close the deal are the same for FSBO and other homes. That means it's crucial to get your finances in order before you start shopping.

Apply for mortgage preapproval with at least a few lenders to compare rates and fees. Sellers will want to know that you've got the financial backing to buy a home. And your real estate agent will be interested in that, too.

When you're preapproved, you'll get a mortgage preapproval letter, which will state how much the lender is willing to loan you and under what terms. The letter will encourage sellers to take your offers seriously, whether or not they have agents.