Boise Real Estate Source


On Saving Money

I wrote a rough draft of this quite some time ago but never posted it. A recent experience with a client and an advertisement that I heard the other day prompted me to dust it off, polish it and finally post:

On Realtors who claim to have 'saved their clients money' and keep a running tally......

This actually isn't just Realtors, it is also some non-Realtor agents and some Limited Service and For Sale By Owner models of selling a home as well. I am not going to say anything at all about or against different sales models.  I am not even specifcally talking about commissions charged here, though it is part of the equation. I am strictly and only talking about the idea of a 'quantified amount of money saved' and that being used as an advertising tool. I simply do not believe this is possible. Of course, generally it is talking about a commission savings. And of course, this is a marketing tactic for consumers to think they are getting a better deal going with XYZ Realty. But people looking to buy or sell a house shouldn't be looking simply at commission saved; you should be looking at the full picture.

Let me quickly note that this is not a 'flat fee or discount broker bashing' post. And, again, I am not talking specifically about commissions or an amount charged.  I am simply trying to educate consumers to think past just commissions charged. I have worked with and know some excellent Realtors who may charge less than I do. But we all charge fees that we believe are equal to what our value is and I firmly believe I can service you better, find you the best house, get you the BEST deal (saving you money!!) with the value, the knowledge, expertise, and negotiation skills I bring to the table. And I am always continuing to learn more and better myself for the benefit of my clients here in the Treasure Valley.

Let me give you a real life example. I'll even work with the real number. A few years back I listed a property in Nampa, Idaho market. John and I did a thorough CMA. With the sellers we came to an agreed upon price based on comps, the seller motivation and the market. Across the street was the same exact floor plan, same lot size, same age, good condition for sale for $19,000 less than ours. It had been on the market for at least three months (in a fairly hot market). I told my sellers upfront that they needed to realize that my marketing would probably sell that house first.

So, the basics: that house was listed for $148,000. Let's assume it sold for that (I don't know for sure because Idaho is a non-disclosure state and the property wasn't in the MLS; it may have sold for less). Let's also assume that they only paid a flat commission of $3000 and didn't pay even 3% for a buyer agent (not saying this is standard, but it is a compared cost to my scenerio). Their total net (not including basic title and recording costs that would be fairly equal in each sale) is $145,000. My listing sold for $162,500. These sellers paid a total of 6% commission to listing and selling agents. Even after this commission paid their net was approximately $152,750 (not including basic title and recording costs that would be fairly equal in each sale) - nearly $8,000 MORE than the same house across the street. This doesn't even take into consideration length of time on the market and money lost if that other seller really needed to sell and had to keep paying mortgage payments, utilities, etc. in the meantime. But, this "'successful sale" would claim on these quantified tallies as having "saved their clients $5880" because they didn't have to pay this in commission. The reality is that it lost them at least $8,000. If a buyer's agent were involved and was paid 3%, "commission saved" would only be $1440 and the lost amount over $12,000. Now, you can't tell me that in this scenario it was better to save on the commission.

I have got a few other stories like this one - one involves a guy who lost at least $70,000 in the course of a year trying different sales models in an attempt to "save" commissions. If I can make you MORE money, don't you think I am worth my fee? There are also examples of this on the buyer side (one agent charges X% commission but negotiates a better deal than a Rebate Realtor who gets the buyer the house for the full price but then gives them 33% commission back even though they paid more for the house than they had to) but perhaps I'll share those examples in a different post. Again, I am not bashing here. I just want you (truly) to have the BEST agent in the Boise area and want you to see that if commission is all that is important to you in choosing a Realtor you may be shooting yourself in the foot. Make sure you have a Realtor who can do the best job for you and get you the best deal. My point isn't that all Realtors who charge less are worse Realtors. Please do not misunderstand me. My point is DON'T get fixated on the commissions!! Your Realtor, no matter what they charge should be able to do the BEST job for you. And sometimes higher commissions CAN mean higher savings or more money in your pocket too!! And that's a good thing.

Kasey Boles

Managing Broker, Jon Gosche Real Estate, LLC



Owner/Editor, Boles Editing & Proofreading


John Boles / 208.830.6185 /

James Gannon / 208.570.4048 /

Kasey Boles 208.830.6186 /


Boise, Idaho Real Estate

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Comment balloon 0 commentsKasey & John Boles • March 22 2010 12:00PM
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