The Internet is teeming with sites offering to advertise "for sale by owner" (FSBO) properties and providing advice on how to sell your property yourself. When homeowners watch their neighbors sell their homes quickly and sometimes for a higher price than they anticipated, a Realtor's services might seem superfluous.

Estimates of how much the FSBO market has grown in this area vary, but most observers agree that the number of people selling their own homes has increased during this sellers' market.

"Hardly anyone was risking working without a Realtor in 1995 when the market was definitely a buyers' market, but I'd guess now it's about 10 percent of the market locally," says Jim Warkentin, broker owner of Warkentin Co. Realtors in McLean. "That's really not all that high historically, because it used to be as much as 25 percent of the market years and years ago."

David Weiss, president of Help-U-Sell real estate in Annapolis and Springfield, says, "The estimates I've seen are that FSBOs represent 17 percent of the market nationwide, which is a pretty substantial part of the market."

People choose the FSBO route mainly to save the approximately 6 percent of the home sales price that must be paid as commission to a Realtor. On a $200,000 home, the 6 percent commission amounts to approximately $12,000.

In addition, some FSBOs occur when a seller privately finds a buyer, such as a relative or friend of a neighbor, even before the home has been listed for sale.

However, many would-be buyers work with a buyer's agent, which can work against a seller choosing to go FSBO and cut the anticipated savings in half.

"Every agent who walks in the door is representing a buyer, and when you don't hire someone to help you, every single person is teed up against you," says Steve Israel, president of Buyer's Edge, an exclusive buyer brokerage that does not list properties.

Often sellers hire a lawyer to review their contract and represent them at the settlement, a step particularly necessary in FSBO transactions.

"Lawyers are well-versed in contract disputes and settlement issues, but they are not in the business of negotiating real estate contracts and can't know as much as Realtors about multiple contract situations," Mr. Israel says. "There is still no substitute for a good agent who will negotiate on your behalf."

Although saving the Realtor's 6 percent commission seems like a great incentive for FSBOs, it doesn't take buyer agency into account, along with the usual 3 percent fee paid to the buyer's agent.

"In our transactions with FSBOs, the buyer and seller sign an agreement between themselves which resolves the fee structure," Mr. Israel says. "This is called a 'commission addendum' to the contract, in which the seller agrees that we are not representing them and that we are the agents for the buyer. The second part of the agreement is that the total sales price wi

Rather than saving an automatic 6 percent of the sales price of the home, sellers who work without listing agents normally save only 3 percent of the sales price.

Mr. Warkentin points out that FSBO sellers often lose even more money because they lack real estate experience.

"Last year we represented a buyer in a FSBO transaction with someone determined to save every penny he could. He was so concerned about having to the pay the buyer's agent's fee that he never realized that he sold the home at about $20,000 under the appraised value of the property," Mr. Warkentin says. "We agreed on a price for the home, and then he added 3 percent to that to cover the buyer's agent's fee so he could still keep the full sales price of the home for himself. He walked away rejoicing about that 3 percent but never thought about the 7 percent he'd left behind by not working with an experienced agent to set the asking price.

"Another time recently we had an FSBO sell their home to one of our buyers for $270,000 and then come in with paperwork later that the home had appraised for $295,000," he says. "He didn't understand that the contract had been signed, he'd already agreed to a price, and there was nothing he could do.

"Unless you are very savvy and knowledgeable about real estate, it's probably worth it to hire an agent to protect your interests. There are advantages and disadvantages to any scenario, but if you are phenomenally well-versed in real estate or you are a lawyer with real estate experience, the possibility of a FSBO might make sense," Mr. Israel says.

Selling your home yourself has the potential to save money, but it also carries some pitfalls. To help folks find out more about the former and avoid the latter, some area companies provide assistance on a fee-for-service basis rather than charging a commission. Also, Internet sites are available with advertising possibilities and advice. For Sale By Owner Services offers a variety of assistance to sellers.

"For $695, sellers can attend a seminar with information on selling their home, receive a sign for their yard and advertise in our FSBO magazine and on the Internet until the home sells or for six months," says Debbie Kent, president of For Sale By Owner Services in Lake Ridge, Va. "We have in-house professionals who can help sellers, including an appraiser, an in-house mortgage company, and an in-house settlement company. For $475, we can help review a contract and take over the closing for the seller, so all they really have to do is show the home to buyers. We really don't recommend that people do this totally on their own without some professional assistance."

"Often sellers don't know how to handle multiple offers, or legal issues or even that they need to determine whether they have lead paint," Mrs. Kent says. "We have professionals who can help them with these individual problems, and the sellers will still be able to spend only about $1,500 to $1,600 out of pocket for closing costs and fees on a $200,000 home."

Help-U-Sell, a full-service real estate agency for sellers, offers services at a range of prices, charging only for what the seller actually uses rather than a set 6 percent.

"Our research shows us that most buyers come from within the area of a home for sale, either by calling the seller or the listing office because they saw the sign or through the services of an outside agency," says Help-U-Sell's Mr. Weiss.

"Our philosophy is that the seller knows more than an agent about their home and their neighborhood and that if they are willing to participate in the sale by showing their home, they should pay less to the agent," he says.

"If a buyer comes through the neighborhood or through the seller, the seller can pay as little as an average of 2 1/4 percent of the sales price. If the buyer comes through our office, the fee is about 2 1/4 percent plus 1 1/2 percent for the agent who sold the house," Mr. Weiss says.

"If an outside agent brings in the buyer, Help-U-Sell will cooperate with that agency, and the seller will be charged 2 1/4 percent by us, and the usual 3 percent or so will be charged by the outside agent. Our fees are charged on a price range so that a $150,000 to $200,000 home will cost the seller the same amount of money. Sometimes a higher-priced home will actually cost less to sell in terms of percentages than a lower-priced home."

The main concerns, Mr. Weiss says, are whether the potential buyer has been qualified for a loan, and the lack of representation for the seller.

"In lots of cases today, the seller pays the fee to the buyer's agent but they have no representative to work for their best interests. There could be loopholes in the settlement which cost the seller money," Mr. Weiss says.

"Buyers are smart these days, they realize that the seller isn't paying for representation, and they think the savings of the commission should be passed on to them."

The commission adds up, particularly on property in the upper brackets. A buyer's agency fee of 3 percent on a $1 million home is $30,000.

But, as Mr. Israel says, "With more expensive homes, the savings are more significant, but so are the problems."

"People think they can buy a contract in an office-supply store and just fill in the blanks when they are working with a buyer, but they often don't realize just how complicated selling a house can be," Mrs. Kent says. "The standard contract used by Realtors is now about 14 pages long for a reason."

In addition to the lack of knowledge about contracts and legal issues, Mr. Warkentin points out other pitfalls of selling a home without a Realtor.

"It's often bad for people to be personally or emotionally involved with a transaction which involves this amount of money. On top of that, the pricing of your home is suspect to a high degree if you go into it with no information and no knowledge with which to interpret the information you do get," he says.

"Another big problem is that people without real estate experience don't understand what is normal and what isn't. For instance, one seller recently had signed the disclaimer form about the condition of his property and assumed that all the paragraphs in the contract referring to normal operating conditions somehow didn't apply to him. There were major problems with the wiring in the house, and he just couldn't seem to accept responsibility for the basic necessity that the home's heating, plumbing and other systems had to work for the house to go to settlement."

"In my experience with FSBO transactions," Mr. Warkentin says, "the sellers pay too much attention to the little things and not enough attention to the important things. People can see the dollars they are saving and not the ones they are losing."