Is Commission the Most Important Thing? What Actually Moves the Needle

Every so often a seller tells me they found an agent who will list their home for a lower commission, and I always ask the same question: what is that lower number actually buying you? Commission is the most visible number in a real estate transaction, and it is almost never the most important one.

The math nobody does

Say the difference between two agents is one percent of the sale price. On a $500,000 foothill home, that is $5,000. Now imagine one of those agents negotiates $25,000 more on the sale, protects you from a $15,000 credit you did not owe, and keeps a flaky buyer from wasting six weeks of escrow. The cheap listing just cost you tens of thousands of dollars to save a few thousand. The cheapest agent is the most expensive mistake you can make in the biggest transaction of your life.

Where the real money is won and lost

• Pricing strategy: the first two weeks on the market set the ceiling more than anything after.
• Negotiation: the spread between a good offer and a mediocre one is usually larger than any commission.
• Disclosure quality: a missing disclosure can kill a deal at the end of escrow, and you eat the costs.
• System knowledge: wells, septic, fire-zone compliance, and the county process. A missed requirement is a renegotiated price.
• Buyer screening: we qualify every buyer's financing before we present an offer, not after.

I am not going to tell you that commission does not matter. It matters, and I would rather you know exactly what it is and what it buys you than hear it from a clever spreadsheet. But it is the smallest number in the transaction, and it is the only number that gets negotiated before any of the big work happens.

"A good agent doesn't cost you money, he makes you more than he charges. Ask what the cheaper one will make you."

If you want to see the difference in practice rather than in theory, sit down with us before you interview anyone else. We will show you the full cost of the transaction, including what we expect to save or earn for you. Take care, Doug.