For sale by owner means the seller markets and negotiates the sale without hiring a listing agent, to avoid paying that commission. The seller still typically pays the buyer's agent's commission if one is involved, handles showings and paperwork alone, and needs a title company or attorney to close. It saves a fee but shifts the pricing, marketing and negotiating work onto the seller.
Why it matters
Selling FSBO can save a commission, but only if you are ready to do the agent's job yourself.