"Knowledge is power." - Sir Francis Bacon If you are considering selling (or buying) a home, you've probably thought about handling the process yourself. You can save quite a bit of money in commissions if you are willing and able to tackle the legwork and paperwork that a real estate broker or agent traditionally handles.

Before you jump into the fray, however, you should understand some of the pros and cons about For-Sale-by-Owner transactions. The following article outlines some (but certainly not all) of the most-salient points that you should consider so you can make the best informed decisions for your individual financial situation. Remember: there is no right or wrong way to proceed, since your decision depends entirely on the most-important variable -- YOU.

Obviously, you can save thousands of dollars in commissions by undertaking the bulk of the process yourself. Just remember that if you sell to a buyer who found your property using a real estate agent such as through the Multiple Listing Service (MLS), you still might end up paying all or part of the buyer's broker commission. Typically, that would be 2.5 percent - 3 percent of your sales price, although commissions are negotiable.

When you sell it yourself, you are in total control but are responsible for the details a broker or agent would handle. You set the schedule for showings for your own convenience; you research area comparables and set the asking price; you determine your marketing campaign, and you decide how long to try selling it independently since you aren't locked into a contract with a broker or agent for a set number of months.

Agents Play "Mom"

On the other hand, many real estate brokers or agents work for larger companies with name-recognition and a back office staff and infrastructure that essentially work for you 24-hours a day. They can set up open houses and hold showings that don't require the seller to be home. They put lock boxes on doors, ads in their magazines and websites, and fliers in mailboxes. They can negotiate terms of a contract that you might be uncomfortable discussing, and they know that the highest bidder isn't always the best bidder. Whatever it takes to get the deal closed, a good agent will see it through.

One of the most-important jobs brokers or agents perform is playing "Mom." Particularly for first-time buyers, an experienced broker or agent spends time handholding and reassuring nervous buyers that they are making the right decision or calming down stressed-out sellers. Someone who sells on his or her own might not have anyone to use as a sounding board.

But if you do sell it by yourself, that doesn't mean you are completely on your own. There are a number of do-it-yourself selling companies, many of them web-based, that will guide you through handling one or more aspects of the transaction. They charge a much smaller commission or a flat-fee to assist you with services such as listing the property on their website or in their magazine; supplying various promotional literature and advertising materials such as yard signs and fliers, or providing legal forms.

Most of these firms have a fee schedule that spells out in detail how much they charge for particular services. For instance, one do-it-yourself website offers various packages ranging from full-service real estate agents who charge only 4 percent in commission in the Chicago area, to budget-conscious plans that cost $100 or less but require you to do most of the work yourself. That same company also offers you exposure on the MLS for a 1.5-percent commission, an option that also could end up involving a commission for a buyer's realtor if you accept a buyer brought by a real estate broker or agent.

If you are a do-it-yourself seller, you also might act as your own "general contractor" and sub-contract certain portions of the process that you either aren't comfortable dealing with or don't have time to handle. You can hand pick many of the other professionals involved in your end of the transaction, according to your own ability and your state regulations and laws.

Check Out State Regulations

You definitely need to check out your state's regulations to ensure that you know what you're getting into legally. For example, most states require the seller to fill out and provide the buyer with legally binding disclosure forms, regardless of whether the property is sold by a licensed broker or agent or an individual. But state regulations can vary widely about how you must treat certain portions of the transaction. For instance, in some states escrow companies physically host and handle the closing, while other states require attorneys or title companies to deal with the closing process.

Even if your state doesn't require it, you should seriously consider enlisting the help of an experienced real estate attorney to handle the contract and closing details. The lawyer's fee will more than pay for itself in confidence that your transaction and closing details are in line with your state's requirements and that you won't run into potentially costly glitches.

Another issue you must consider is your own personality. Are you outgoing and genial enough to deal directly with sometimes blunt and opinionated buyers who might have tramped through 49 other homes before they reached your beloved abode. Face-to-face contact with potential buyers can be a blessing if it helps you fine-turn your selling pitch and learn what buyers do and don't like about your home without dealing with a real estate agent or broker as a filter in the middle.

But if you really can't stomach the thought of someone saying how ugly your family room's carpet is or interrupting your Sunday night football game at the two-minute warning, then you might want to consider enlisting someone else (friend? agent?) to deal with the showings. Also, some viewers might be more honest with an agent about how they felt about the house than they would be with the owner.

Realistic Pricing Key

Are you realistic in your expectations? Are you overly attached to your house and not making logical financial decisions about it? If you can't honestly step back and "see" your charming home as simply a "house," with all its eccentricities and imperfections, then you might have trouble setting a realistic asking price. The most-obvious danger is overpricing it then having to lower the price after several potential buyers already have scanned and rejected the property simply because it was more expensive than comparable properties in the area.

A real estate broker or agent can help you view the property with "new" eyes and give you tips on how to clean it up for the best presentation to buyers. If your home needs work, a realty broker or agent also might have a file of names of quality repair firms she or he has used in the past.

You also might need to screen potential buyers and require that bidders be pre-approved for a mortgage. That's among the biggest problems some real estate agents and brokers say they encounter. Unless you are in a "hot" market where housing prices are appreciating rapidly, lenders could reject a borrower if they feel the purchase price is too high and the borrower has 10 percent or less as a down payment.

Real estate brokers and agents can help weed out the casual "browsers" or unqualified buyers so you don't invest precious time dealing with bidders who may have good intentions but end up not being qualified for the financing they need, causing the deal to fall through. They also might be able to give you the names of various lenders they have worked with who could help if you or your buyer need guidance or assistance with the mortgage process.

Clearly, much of the decision-making process for selling your home boils down to simple self-reflection and common sense. One way to think about it is to ask yourself this: do you prefer to cook meals yourself at home and spend the savings elsewhere, or do you like white-table-cloth service and don't mind paying for it. The choice is yours.