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A home that’s for sale by owner opens the door for you to buy the property without a middleman — though you may choose to use your own real estate agent to facilitate the transaction. A for-sale-by-owner deal can differ from a typical real estate transaction in a few important ways, so study this guide before you start perusing listings.

Buying a House for Sale by Owner

When homeowners choose the FSBO (“fizz-bo”) route, they take on all of the responsibilities real estate agents would typically shoulder in the homebuying process, from listing the house and showing it to negotiating and closing the deal.

The main motivation for doing so is often cash. Sellers who go it alone can save money on the real estate commission fee. If neither side uses an agent, the deal sidesteps the typical amount the seller would typically pay in commissions.

On the buyer’s side there can be a number of benefits of buying a house for sale by owner. First of all, the lack of a listing agent means you have more direct contact with the seller, which might give you more negotiating power. The seller will also likely have detailed knowledge of the house and neighborhood, which can be a bonus as you decide whether or not you want the property.

However, you may run into some pitfalls with FSBO properties. A seller may love her home and overprice it, potentially complicating matters when you get an appraisal.

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Using a Buyer’s Real Estate Agent

The home’s seller may not want to use a listing agent, but you can still engage the services of a buyer’s agent. You may already be working with an agent who can contact a FSBO seller for you. Or you may need to look for an agent who is willing to take on the job.

In some cases, buyer’s agents may be hesitant to work on a FSBO property. They may be wary of taking on extra liability, or extra work for which they will not necessarily be compensated.

That said, a buyer’s agent can negotiate the sale on your behalf and walk you through the complicated paperwork. If the seller is putting the contract together, your agent can also check the work to make sure you don’t run into any problems. Bear in mind, though, that your agent will need to be paid for these services, and you might be the one footing the bill. Although in the past it was common for sellers to cover agents’ commission, you will now need to have a representation agreement with your agent, defining compensation, before touring homes. You can still ask the home’s owner to pay your agent’s fee as a negotiation tactic, but you can’t count on it happening, particularly with a FSBO home where the seller isn’t paying an agent of their own.

Here’s what to expect in the FSBO buying process.

Shopping for a Mortgage

Before making an offer on a home, it’s a good idea to shop for a mortgage to get an idea of the terms different lenders offer and how much you are likely to pay each month.

A mortgage calculator can help you understand how down payments of various sizes will affect the numbers. And you may consider getting preapproved for a mortgage to see exactly how much you can afford to spend.

In an FSBO situation, homeowners may have no experience with the home financing process, and getting prequalified or preapproved for a home loan may remove some roadblocks on your path to making a purchase.

Viewing the Home

Your agent can contact the seller and set up an appointment to view the home. When you visit, be on the lookout for sagging floors or cracks in walls that might indicate structural issues. Test windows. Look for water damage on ceilings or walls that may be a sign of a leaky roof.

Since the seller will most likely be showing the house, take this opportunity to get as much detail about the home’s history as possible. What repairs have been made recently, and which ones haven’t been made in a while? It’s smart to ask about any warranties, and to be sure they will remain after a sale.

Recommended: What to Look for When Buying a House

Getting an Inspection

When buying a home for sale by owner, it’s unwise to skip an inspection. Home inspectors go over the house with a fine-toothed comb, looking at structure, plumbing, electricity, and appliances to see whether they need repair now or in the near future. (This home inspection checklist shows you what should be covered.)

If the inspector finds any problems, you can ask the seller to fix them, credit you the cost of repairs, or reduce the sales price. If you’ve already signed a purchase agreement, severe problems found during an inspection can be a reason to pull out of the contract.

Negotiating a Sale Yourself

If you decide not to use a buyer’s agent, you and the seller will have to negotiate the sale and write up the purchase contract yourself. You may also choose to hire a transactional agent or attorney who can help you write the contract and ensure it is done legally and in a way that protects your rights. If you do decide to go it alone, below are a few things to keep in mind.

Recommended: How to Buy a House Without a Realtor^®

Making an Offer

Before making an offer on a house, check comparable properties in the neighborhood and see if the listing price is reasonable. Doing so can help you pin down what a reasonable offer is.

Consider offering less than the listing price. The seller may ask you to come up in the asking price, but if you start too high, it’s difficult to negotiate down again. You can use the neighborhood comps you’ve researched as a negotiating tool.

Including Contingencies

Contingencies are certain conditions that must be met in order to close the deal. Some common contingencies are a satisfactory home inspection and property valuation, also known as an appraisal. If a home is appraised at less than the agreed-upon price, a lender may be unwilling to loan the buyer the money. In that case, the appraisal contingency can be an opportunity to negotiate the sales price.

A clear title is another common contingency. The title is a document that shows who has owned and now owns the home. The title company will make sure there are no liens or disputes associated with the property. If there are unresolvable issues, the clear-title contingency gives the buyer a way out of the contract.

Negotiating Fees

It can’t hurt to ask for seller concessions, such as closing costs that the seller agrees to pay. A seller may agree to help pay for property taxes, attorney fees, appraisal inspections, and the like. Even in a seller’s market, if the property has been sitting, possibly because the price was too high, a seller may offer a financial incentive to move the home.

Putting Earnest Money in Escrow

Your earnest money deposit is the money you submit with your offer to demonstrate your serious intent to buy.

The listing agent would usually put this money into escrow. But if you’re going it alone, it’s a good idea to engage a title company or escrow company to hold the money for you until the sale goes through.

If you give the money directly to the seller, they may refuse to give it back to you if a contingency causes the deal to fall through, which could mean suing to retrieve your cash.

Determining When You’ll Get Possession

Be sure your purchase agreement specifies when you will take possession of the new house and receive the keys. Possession may take place immediately after closing, or the contract may give the seller time to move.

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The Takeaway

Buying a house for sale by owner can come with challenges and opportunities. It may make sense to engage a professional real estate attorney to help you negotiate and deal with the documents. Another option is to engage a buyer’s real estate agent who can help safeguard your interests.

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FAQ

Is an FSBO house always cheaper?

A house that is for sale by owner isn’t always a great deal. Some owners, lacking the pricing advice usually provided by a real estate agent and having a strong emotional attachment to their property, might actually overprice their home when they list it for sale. Make sure you have the property inspected and appraised before you buy.

How can I determine if a FSBO house is fairly priced?

In the early phase of your home-buying process you can get a sense of whether or not a home is fairly priced by searching real estate sites for “sold” prices for similar properties in the area. If you are making an offer, you can enlist the help of a buyer’s agent. You should also hire an appraiser to value the property.

Can I buy a FSBO house without a real estate agent?

You can buy a house directly from its owner without the help of a real estate agent, but it’s more work for you and you’ll want to make sure your needs are represented in the transaction. If you choose to go without a real estate agent, engage the services of a real estate attorney to ensure the sale contract protects your interests.

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An asset is anything of value that you own, whether physical (such as a home or bank account) or intangible (as in a brand or copyright) that can be converted to cash or income, or which offers the potential for some future financial benefit.

For individuals, assets generally refer to savings, investments, property (including personal property such as jewelry or art). For businesses, assets can refer to cash, brand equity, real property, intellectual property, and more.

Investors need to understand the many types of assets, how they behave, and how they can be combined within an investment strategy.

Exploring the Definition of an Asset

For individuals, an asset can mean almost anything you own that has some monetary value, and offers the potential for growth or some future benefit.

Broad Categories of Assets

Assets typically include such things as:

•   Cash and cash equivalents, including checking and savings accounts, money market accounts, certificates of deposit (CDs), and U.S. government Treasury bills.

•   Personal property, including cars and boats, art and jewelry, collections, furniture, and things like computers, cameras, phones, and TVs.

•   Real estate, residential or commercial, including land and/or structures on the land.

•   Investments, such as stocks and bonds, annuities, mutual funds and exchange-traded funds (ETFs), and so on.

•   Intellectual property, such as patents, copyrights, trademarks, brands and brand equity.

Those who own a company or who are self-employed also may have business assets that could include a bank account, an inventory of goods to sell, accounts receivable (money they’re owed by their customers), business vehicles, office furniture and machinery, and the building and land where they conduct their business, in addition to intellectual property assets, as noted above.

4 Different Types of Assets

Generally speaking, there are four different types of assets: current or short-term assets, fixed assets, financial investments, and intangible assets.

Current Assets

Current assets are short-term resources with economic value, and are typically referred to in accounting. Current assets are things that can be used or consumed or converted to money within a year. They include things like cash, cash equivalents, inventory, and accounts receivable.

Fixed or Noncurrent Assets

Fixed assets are resources with a longer term, meaning more than a year. This includes property, e.g., buildings and other real estate, and equipment.

Financial Assets

Financial assets refer to securities that you might purchase when investing online or through a traditional brokerage, such as stocks, bonds, certificates of deposit (CDs), mutual funds, ETFs, commodities, retirement accounts (e.g., IRAs and 401ks) and more.

Intangible Assets

Assets considered intangible are things of value that don’t have a physical presence. This includes intellectual property like patents, licenses, trademarks, and copyrights, and brand value and reputation.

Identifying and Classifying Assets

Assets are things with economic value. They may be owned by you, like a sofa or your computer, or owed to you, like the $500 you earned from a project, or the $50 you loaned a friend. The loan or borrowed money is considered an asset for you since your friend will repay it to you.

Personal vs Business Assets

There are both personal assets and business assets. Personal assets include such things as your home, artwork you might own, your checking account, and your investments. Business assets are things like equipment, cash, and accounts receivable.

Liquid Assets and Their Convertibility

Liquid assets have economic value and can be quickly and easily converted to cash.

Liquid assets might include certain stocks, and liquid business assets could include inventory.

Assets in Accounting and Business Operations

In business, assets are resources owned by a business that have economic value. They might refer to the building the business owns, inventory, accounts receivable, office furniture, and computers or other technology.

How Assets Are Listed on Financial Statements

Business assets are listed on a company’s financial statements. Ideally, a company’s assets should be balanced between short-term assets and fixed and long-term assets. That indicates that the business has assets it can use right now, such as cash, and those that will be available down the road.

The Distinction Between Assets and Liabilities

Assets are resources an individual or business owns that have economic value. Assets are also things owed to a business or individual, such as payment for inventory.

A liability is when a business or individual owes another party. It could include things like money or accounts payable.

Asset Valuation and Depreciation

Asset valuation is a way of determining the value of an asset. There are different methods for determining value, such as the cost method, which bases an asset’s value on its original price. But assets also depreciate over time. That’s when an accounting method known as depreciation is used to allocate the cost of an asset over time.

Real-World Examples of Assets

As noted, assets can run the gamut from the physical to the intangible. What they all have in common is that they have economic value.

Everyday Items That Count as Assets

Many items that you use or deal with in your daily life are considered assets. For example:

•   Cash

•   Bank accounts

•   Stocks

•   Bonds

•   Money market funds

•   Mutual funds

•   Furniture

•   Jewelry

•   Cars

•   House

•   Certificates of deposit (CDs)

•   Retirement accounts, such as 401(k)s and IRAs

Recommended: Stock Market Basics

High-Value Assets in Today’s Market

The value of assets changes depending on market conditions. As of Q4 2025, a number of key economic indicators are at historic highs, including: median home prices, company valuations as measured by price-to-earning ratios, and stock market indexes like the Dow Jones Industrial Average (DIGA) and the S&P 500.

These higher-than-average values and performance metrics may not impact all assets equally, but it’s important for investors to take current market conditions into account when buying stocks and other securities, and assessing the value of their portfolios.

While it may be the case that some larger assets you own tend to be more valuable, such as your house, a vacation home, or rental property — or that different securities in your portfolio may have seen some growth — there are no guarantees, and investors interested in self-directed investing must evaluate each type of asset on its own terms.

Understanding Non-Physical and Intangible Assets

Intangible or non-physical assets can be extremely important and quite valuable. So it’s wise to be aware of what they are.

Copyrights, Patents, and Goodwill

Intangible assets include such things as copyrights (on a book or piece of music, for instance) and patents (for an invention). A copyright protects the owner who produced it, and a patent protects the patent owner/inventor. What this means is that another party cannot legally use their work or invention without their permission, license, or in some cases payment.

Goodwill is another intangible asset, and it’s associated with the purchase of one company by another company. It is the portion of the purchase price that’s higher than the sum of the net fair value of all of the company’s assets bought and liabilities assumed.

For example, such things as brand value, reputation, and a company’s customer base are considered goodwill. These intangibles could be highly valued and the reason why a purchasing company might pay more for the company they are buying.

The Role of Digital Assets in the Modern Economy

Digital assets refer to such things as data, photos, videos, music, manuscripts, and more. Digital assets create value for the person or company that owns them.

Digital assets are becoming increasingly important as individuals, businesses, and governments use them more and more. With more of our every day resources online, and with data stored digitally, these types of assets are likely to be considered quite valuable.

Labor and Human Capital: Are Skills and Expertise Assets?

Labor is not considered an asset. Instead, it is work carried out by people that they are paid for.

Human capital refers to the value of an employee’s skills, experience, and expertise. These things are considered intangible assets. However, a company cannot list human capital on its balance sheet.

Navigating Asset Management

As an investor, you’re also likely to hear about the importance of “asset allocation” or “asset management” for your portfolio. Asset allocation is simply putting money to work in the best possible places to reach financial goals.

The idea is that by spreading money over different types of investments — stocks, bonds, cash, real estate, commodities, etc. — an investor can limit volatility and attempt to maximize the benefits of each asset class.

For example, stocks may offer the best opportunity for long-term growth, but can expose an investor to more risk. Bonds tend to have less risk and can provide an income stream, but their value can be affected by rising interest rates. Cash can be useful for emergencies and short-term goals, but it isn’t going to offer much growth, and it won’t necessarily keep up with inflation over the long term.

When it comes to volatility, each asset class may react differently to a piece of economic news or a national or global event, so by combining multiple assets in one portfolio, an investor may be able to help mitigate the risk overall.

Alternative investments such as real property, precious metals, and private equity ventures are examples of assets some investors also may choose to use to counter the price movements of a traditional investment portfolio.

How Does Asset Allocation Work?

An investor’s asset allocation typically has some mix of stocks, bonds, and cash — but the percentages of each can vary based on a person’s age, the goals for those investments, and/or a person’s tolerance for risk.

If for example, someone is saving for a wedding or another shorter-term financial goal, they may want to keep a percentage of that money in a safe, easy-to-access account, such as a high-yield online deposit account. An account like this would allow that money to grow with a competitive interest rate while it’s protected from the market’s unpredictable movements.

But for a longer-term goal, like saving for retirement, some might invest a percentage of money in the market and risk some volatility with stocks, mutual funds, and/or ETFs. This way the money may potentially grow over the long-term, and there may likely be time to recover from market fluctuations. As retirement nears, some people may wish to slowly shift their investments to an allocation that carries less risk.

The Role of Automated Asset Management Solutions

Businesses may want to consider using automated asset management systems to track and collect data on their assets. This may be easier than manually tracking assets, which could become complicated and overwhelming. There are a number of different software programs available that could help businesses with this.

Individual investors might want to think about automated investing portfolios to help manage their investments. These platforms, sometimes called robo advisors, may help those who want to invest for the long-term but don’t have the time or expertise to do it themselves.

However, it’s important to do your homework and consider the risks involved since automated platforms are not fully customized to each individual’s specific needs. You also need to be comfortable with the types of investments they may offer, such as ETFs, and make sure you understand the risks and possible costs involved.

Unpacking Asset Classifications Further

The assets you accumulate will likely change over time, as will your needs and your goals. So, it’s important to know the purpose of each asset you own — as well as which ones are working for you and which ones aren’t. Here are some questions you can ask yourself as you manage your assets:

1.    Are you getting the maximum return on your investment, whether it’s a savings account or an investment in the market?

2.    How does the asset make money (dividends, interest, appreciation)? What must happen for the investment to increase in value?

3.    How does the asset match up with your personal and financial goals?

4.    Is the asset short-term or long-term?

5.    How liquid is the investment? How hard would it be to sell if you needed money right away?

6.    What are the risks associated with the investment? What is the most you could lose? Can you handle the risk financially and emotionally?

If you aren’t sure of the answers to these questions, you may wish to get some help from a financial advisor who, among other things, can work with you to set priorities, suggest strategies for investing, assist you in coming up with the right asset allocation to suit your needs, and draw up a coordinated and comprehensive financial plan.

Short-term vs Long-term Assets

As a quick recap, short-term assets are those held for less than one year. They are also known as current assets. These assets are typically meant to be converted into cash within a year and are considered liquid. For individual investors they can include such things as money market accounts and CDs.

Long-term assets are those held for more than one year. Long-term assets can be such things as stock and bonds, as well as fixed assets such as property and real estate. Long-term assets also include intellectual property such as copyrights and patents. Long-term assets are not as liquid as short-term assets.

The Importance of Asset Liquidity

Liquid assets can be accessed quickly and converted to cash without losing much of their value. Cash is the ultimate liquid asset, but there are plenty of other examples.

If you can expect to find a number of interested buyers who will pay a fair price, and you can make the sale with some speed, your asset is probably liquid. Stock from a blue-chip company is generally considered a liquid asset because it’s relatively easy to buy and sell. So, typically, is a high-quality mutual fund.

Some assets are non-liquid or illiquid. These assets have value, but they may not be as easy to convert into cash when it’s needed. Your car or home might be your biggest asset, for example, depending on how much of it you actually own. But It might take a while to get a fair price if you sold it — and you’ll likely need to replace it eventually.

While some investments have long-term objectives — including saving for a secure retirement — liquidity can be an important factor to consider when evaluating which assets belong in a portfolio.

How to Balance Liquidity

Many unexpected events come with big price tags, so it can help to have some cash or cash equivalents on hand in case an urgent need comes up. Financial professionals often suggest having three to six months’ worth of living expenses stashed away in an emergency fund — using an account that’s available whenever you need it.

Some might also consider keeping a portion of money in investments that are reasonably liquid, such as stocks, bonds, mutual funds and exchange-traded funds (ETFs). This way, ideally, the assets can be liquidated in a relatively quick timeframe if they are needed. (Although, of course, there’s never any guarantee.)

Choosing that original asset allocation is important — but maintenance and portfolio rebalancing is also key over time. As people attain some of their short- or mid-range goals (paying for that wedding, for instance, or getting the down payment on a house) they may wish to consider where the money will go next, and what kind of account it should be in.

The Role of Rebalancing

As life changes, it is possible that the original balance of stocks vs. bonds vs. other investments is no longer appropriate for a person’s current and future needs. As a result, they may want to become more aggressive or more conservative, depending on the situation.

Rebalancing also may become necessary if the success — or failure — of a particular asset group alters a portfolio’s target allocation.

If, for example, after a big market rally or long bull run (both of which we’ve experienced in recent years), a 60% allocation to stocks grows closer to 75%, it may trigger an investor to consider selling some stock in order to restore that original 60% allocation. This way, an investor may help protect some of the profits while buying other assets when they are down in price.

You can do your rebalancing manually or automatically. Some investors check in on their portfolio regularly (monthly, quarterly or annually) and adjust it if necessary. Others rebalance when a set allocation shifts noticeably.

The Takeaway

As investors and businesses take stock of their assets, it’s important to understand all the physical and non-physical items they own that may have value, and whether these can be converted to cash now, or may hold some value or offer some growth in the future.

Different assets have different values, different levels of liquidity, and perform differently under different market conditions. In addition, some assets can be riskier than others. It’s important to view one’s assets not as fixed items, but as parts of a dynamic whole that require oversight in order to manage risk and aim for better outcomes where possible.

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FAQ

Why is it important to have assets?

For businesses and individuals alike, assets can provide a base of financial stability and may offer the potential for growth. Assets are rarely fixed; the value of most assets changes over time or according to market conditions. In that sense, investors may want to manage the potential risks and rewards of different types of assets.

What is asset allocation?

Asset allocation refers to the mix of different securities in an investment portfolio, and it can be considered a reflection of an investor’s financial goals and risk tolerance. For example, an investor may have a more equity-focused asset allocation in their retirement account when they’re younger, and a fixed-income allocation when they’re older and may want to avoid undue risk exposure.

What are assets vs income?

Assets are the physical or intangible (non-physical or digital) items which a company or individual owns that possess monetary value; meaning, assets can be converted to cash, or may offer future gains. Income refers specifically to liquid cash flow or earnings that come from work, business operations, product sales, and more. In some cases, an asset may be income producing, e.g., an intellectual property license or a rental property.