Why Most Kansas City Real Estate For Sale By Owner’s (FSBO's) Fail

Why Most Kansas City Real Estate For Sale By Owner’s (FSBO's) Fail

The typical driving force behind most Kansas City for sale by owner homes (FSBO) is to save the Real Estate commission. Even though I am  in the business of selling Kansas City Real Estate I can clearly understand a homeowner's motivation to save the real estate commission. That is a lot of money that is spent for nothing, right?

Most people I know like to save money. Who doesn't? Especially in a tough economy and also during the holiday season. In a Real Estate sale saving a commission translates into a tremendous amount of money. It is hard to blame any homeowner for their desire to save the type of dollars that are made when a Kansas City Realtor sells a home.

While commission rates are negotiable, in most parts of Kansas City if you are selling a home you will more than likely be paying a Real Estate commission between 4%-7% on the sales price of the property being sold.

Lets look at the numbers . . .

On a $200,000 home at a real estate commission of 5% the total commission is $10,000. There is no doubt that is a lot of mullah at stake, right!

Here are some FSBO stats:

 Just 10% percent of home sellers chose the FSBO (“For Sale By Owner”) route, down from 13 percent the previous year, according to NAR’s Profile of Home Buyers and Sellers. This is down from about 20 percent in 1987. The decline is blamed on the lack of traditional marketing and the increase of online marketing.

• 84% of FSBO’s eventually hire a Realtor® (realtor.org)
• According to a study by NAR® , only 10% of homes were successfully sold by the owner (realtor.org)
• Only 5% of home buyers purchased directly from owners they didn’t know (realtor.org).
• The vast majority of FSBO sales were to friends or relatives (and if you’re selling to a friend or relative, it’s almost guaranteed that you aren’t getting full market value for your home).
• 91% of buyers are represented by a Realtor® (car.org)
• According to the NAR® Profile of Buyers and Sellers Report, the median sales price of sold FSBO homes was 17% LOWER than the median sales price of homes sold through Realtors®

Selling a Kansas City property for sale by owner however is not an a simple task and that is why most home owners fail and 80% of the FSBO's end up hiring a Realtor. Nationally the success rate of a for sale by owner (FSBO) is very low. Why is going the route of selling without a Kansas City Realtor such a difficult task? There are quite a few reasons why selling FSBO is a difficult task to pull off.

Let me give you a few reasons why Kansas City For Sale By Owners Fail:

1) Lack of online marketing presence - Nearly 78% of home buyers start their home search online and 96% will search online during the house hunting process. With those kind of percentages it is important to have an online presence.

2) Wrong listing price - A common problem with a few home sellers is to think their home is worth more than what it is really worth. By pricing correctly, a home seller will eliminate the stagnant period and low ball offers.

3) Not properly qualifying buyers - Many FSBO's spend their time showing and negotiating with unqualified home buyers. Don't blame yourself if you have made this mistake. In real estate, we call it a rookie mistake.

4) Not available to show the home - Wow, a buyers want to look at the home when they are available, not around your schedule. They don't care you have work, errands to do, games to attend or your sick. 

5) Buyer wants to save the commission - Why would a home buyer drive all around town, do the researching and schedule the showings versus having a REALTOR do all of the work and use their gas and car? Because they want to save the commission. Guess, what? There is only one commission and both the buyer and seller can't save it.

6) Home doesn't show well - It is hard to judge and stage your own home. Chances are you like the way it looks and it will be hard to be impartial. 

RE/MAX sells more homes than any other real estate company.
For a reason...should we talk?

Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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