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More homesellers are going it alone — should you?

When Loretta Harrison, 66, decided to put her 1.2-acre North Carolina home on the market last year, she took the traditional approach — she handed the listing off to a realtor, who, for a 6% commission, promised to find them a buyer.

Six months later, she wasn’t impressed.

“I didn’t feel like [the realtor] was doing anything more than what I could have been doing,” Harrison told Yahoo Finance. “I did a lot of research and I thought I’d give it a shot.”

Last month, she and her husband listed their home, a three-bedroom, two-and-a-half-bath property, with MLSmyhome.com. The service posts “for sale by owner” listings on a range of sites for a flat fee of $199 for six months. 

Going the DIY route to sell your home is never 100% easy, but thanks to a bevy of FSBO-targeted services today, it’s getting there.

Zillow.com, which lists both FSBO and agent-backed listings, saw the rate of FSBO listings on its site nearly double between January 2012 and February 2014, from 2% to 4%, according to data compiled for Yahoo Finance. ForSaleByOwner.com saw 24% growth in 2013 and 13% year-to-date, according to the site’s general manager, Eddie Tyner.  In major real estate boom towns like New York City, the gains have been even bigger. A report by StreetEasy, a popular New York listings website, noted a 30% growth in FSBO listings in 2013 alone.

Given the fact that demand for real estate is up while the inventory of homes on the market remains pretty tight, it's not all too surprising to see a boost in FSBO listings.

“Whenever there is limited inventory in a particular market, it is not unusual to see more sellers that feel empowered to sell the home themselves hoping to save half or all of the commission,” said Jonathan J. Miller, president of Miller Samuel Inc., a real estate appraisal and consultancy firm. “Of course we see the opposite occur when inventory is readily available, so the use of the FSBO method tends to be subject to market conditions.”

In January, Michael Mayer, 59, listed his Riverside, Calif., home on Owners.com for $400,000. Within four days, he had an open house and sold it for $387,055.

[Click here to check home loan rates in your area.]

"In my previous life I had sold real estate, and so it wasn’t really that big of a leap for me to go ahead and list it,” Mayer said. “I was happy it sold so quick.”

Owners.com and services like it, such as ForSaleByOwner.com and USrealty.com, typically charge a flat-rate fee to help consumers list their homes on multiple websites. For next to nothing, you can do the legwork yourself, too, and post ads on Zillow.com and Craigslist.

“Today, most buyers are going to start their home search online and the majority will do it before they ever hire a realtor,” Tyner says. “There are a lot of ways to get your listing in front of buyers without having to pay a commission.”

But, not surprisingly, among real estate brokers, FSBO listings are like six-figure thorns stuck in their sides.

“I just cringe whenever I hear about [FSBO] listings,” says Michael Corbett, a real estate author and host of NBC’s “Extra’s Mansions and Millionaires. “To me there’s no advantage. It’s kind of like representing yourself in court. You really wouldn’t want to do that.”

True, there are some benefits of having an agent that you can’t replicate online. But there will always be a place for the DIY homeowners looking to cut out the middle man.

The pros of going with a real estate agent:

“Agents talk,” Corbett says. “I’ve had many houses that sold to a client of an agent in the same office because they talk, they network, they can create a buzz about your house coming on the market, things you can’t do yourself.”

Real estate brokers (at least in theory) know the local market and how to price a particular property so it will sell and sell fast. When homeowners try to set their price, they can get caught up in their own personal attachment to the home and wind up overpricing it. That’s often what causes listings to languish for weeks or even months without a sale. The FSBO industry suffered a pretty big blow in 2011, when Colby Sambrotto, cofounder and former CEO of ForSaleByOwner.com, ironically wound up hiring a broker after he tried and failed to sell his Manhattan property.

His problem: not pricing it right.

FSBO listings have a history of selling for much less than broker-backed listings ($184,000 compared to $230,000 in 2013), at least according to report by the National Association of Realtors. Note, though, that the study doesn’t account for how much money FSBO sellers saved on broker fees.

“I often find FSBOs achieve lower prices than those sold by a broker, but not as a rule,” Miller said. “One of the reasons for the lower price [is] FSBO sellers don’t have a negotiating buffer between the two parties, which is probably one of the biggest advantages of using an agent that is not understood by the consumer as well as filtering out “lookers” and those who aren’t qualified.”

Lastly, there’s a bit of an awkward factor that comes into play when you’re selling your home without a middleman. You’ll have to handle your own open houses and field phone calls from brokers who will know the business better than you.

“You can’t just sign a paper and sign over your house. There are so many levels. Home deals are big financial transactions,” Corbett says. “There’s a lot of negotiating going on … and each one of those negotiations has to be handled professionally and non-emotionally and it’s very hard to represent yourself.”

The pros of FSBO sales:

Still, you can’t deny the cost-benefit of going it alone. Even though you may still have to pay your buyer’s agent a commission (3% usually), that’s still half what you’d wind up paying if you had your own broker’s commission to cover as well.

Just be sure you’re getting what you pay for. A key feature to look for in a FSBO service is the ability to get your home listed on local multi-listing service (MLS) websites, which is where selling agents search for properties for their clients. You will pay a fee for the service, but without it, you might as well just put up an ad on Craigslist and call it a day.

Mayer, for example, paid $395 for a package on Owners.com, which granted him exposure on his local MLS.

And if you already know an interested buyer, half the battle is already won. Forty percent of homeowners who sell without an agent know their prospective buyer, according to the NAR.

Whether or not you decide to list your own home, keep in mind that it probably won’t be a cakewalk.

Here are a couple of tips to get started:

Make sure the price is right. You can’t price your home based on a whim, and it will take careful research to be sure you’re in line with the value of comparable homes in your neighborhood. Use sites like Trulia or Zillow to search for home prices in your zip code. “And if you feel like those [online] tools aren’t working, pay the $300 to have somebody do an official appraisal,” Tyner says. “Ultimately, that’s going to be the number the bank or mortgage lender will come back to. It might be a good investment.” To find an appraiser, check out appraisers.org.

Hire an excellent lawyer. With or without an agent, you can’t complete a home sale transaction without a good real estate attorney. Services for a typical home sale cost around $250 to $500, Tyner says. Ask friends and family for referrals, or try sites like the National Association of Consumer Advocates or The American Bar Assocation.

“The availability of technology in general has made everything more transparent,” Tyner says. “All the information somebody would need to [sell their home] is available to them if they’re willing to put in the work to do it.