The Real Cost of Hiring a Real Estate Agent: It's More Than Just Commission
Is Saving on Commission Really Saving?
When selling a home, every homeowner wants to make the most money possible. Naturally, many sellers look at commission as an expense to minimize—but what if I told you that choosing an agent based on a low commission rate could actually cost you more in the end?
📌 A strong marketing plan, expert negotiation skills, and experience can bring in thousands (or even tens of thousands) of dollars more for your home. But when homeowners choose an agent based solely on commission, they may be sacrificing quality, strategy, and ultimately, profit.
💡 Think of it this way:
• Would you hire the cheapest surgeon for a critical operation? 🤕
• Would you choose a discount lawyer to represent you in a life-changing case? ⚖️
• Would you trust a mechanic offering half-price brake repairs? 🚗
Yet, many sellers make this critical mistake when hiring a real estate agent. Let’s explore a real-world example of how this choice backfired for a couple who thought they were saving money but actually lost thousands in the end.
John & Nancy’s Costly Mistake: A True Story 😬
John and Nancy were excited to sell their home and move to their dream location. Like many homeowners, they interviewed a few real estate agents before making their decision. However, instead of selecting an agent based on marketing strategy, experience, and negotiation skills, they chose the one with the lowest commission rate.
At first, they felt great about their decision, thinking they were saving 2% on commission fees. But soon, things took a turn for the worse.
🚩 Problem #1: Poor Marketing Led to Fewer Buyers
Their agent took cell phone photos of their home, didn’t invest in staging, and relied on MLS alone to market the property. As a result:
• Their listing received little attention.
• They had few showings compared to competing properties.
• After three weeks, no serious offers came in.
Meanwhile, their neighbor (who hired a full-service agent) had professional photos, a 3D tour, targeted social media marketing, and a well-attended open house—and sold their home in 5 days at full asking price.
🚩 Problem #2: Weak Negotiation Skills Led to a Lower Sale Price
After weeks of waiting, John and Nancy finally received an offer. But their agent, lacking negotiation experience, immediately pressured them to accept a lowball offer instead of countering for a better deal.
👉 The buyers originally offered $785,000 on a home that should have sold for $800,000+.
👉 A skilled agent could have negotiated a multiple-offer situation to drive up the price.
👉 Instead, their agent accepted the lowball offer without pushing for more.
🚩 Problem #3: Contract Mistakes Cost Even More
As if the lower sale price wasn’t bad enough, their agent missed a critical contract discrepancy that ended up costing them even more money. The contract contained errors related to:
• The closing costs, which were wrongly allocated in the buyers’ favor.
• A home inspection clause that wasn’t negotiated properly, forcing John and Nancy to spend thousands on unnecessary repairs before closing.
By the time everything was finalized, their net proceeds were far lower than expected, making their “commission savings” meaningless.
📉 The Final Cost: What Did They Lose?
|
Decision
|
Expected Outcome
|
What Actually Happened
|
Losses
|
|---|---|---|---|
| Home Sale Price | $800,000 | $785,000 (lowball offer) |
- $15,000
|
| Missed Negotiation | + $10,000 (from mulitple offers) | $0 |
- $10,000
|
| Contract Mistakes | $0 (properly handled) | - $5,000 (closing cost errors & repairs) |
- $5,000
|
| TOTAL LOSS - $30,000 |
💡 What they thought they were saving in commission ended up costing them $30,000!
The Right Questions to Ask When Hiring a Real Estate Agent
Instead of focusing on commission alone, sellers should be asking:
📢 1. Marketing & Exposure
✅ How will you market my home to attract the most buyers?
✅ Do you use professional photography, video tours, and digital ads?
✅ How will you target buyers beyond just the MLS?
💰 2. Negotiation & Experience
✅ How many homes have you sold in this area?
✅ Can you provide examples of past successful negotiations?
✅ How do you handle lowball offers and bidding wars?
📊 3. Pricing & Strategy
✅ How do you determine the best listing price?
✅ What’s your average list-to-sale price ratio?
✅ How do you position a home to get multiple offers?
📝 4. Contract & Fine Print
✅ What fees are included in your commission?
✅ How do you handle home inspections and contract negotiations?
✅ Are there any hidden fees or clauses to be aware of?
The Hidden Cost of Cutting Commission
Let’s break it down:
🚨 Less Marketing = Fewer Buyers = Lower Offers
🚨 Weak Negotiation = Money Left on the Table
🚨 Inexperience = Costly Mistakes & Delays
Now, imagine this scenario:
• You hire a skilled agent who negotiates an extra $25,000 on your sale price.
• You compare that to an agent who “saves” you $10,000 in commission but sells for $30,000 less.
💡 Would you rather save a little on commission or make more money overall?
Real Life Example #1: The Vaughan Family Who Tried to Sell on Their Own (FSBO) For Sale By Owner🏠❌
The Situation:
A young family in Vaughan bought a beautiful new construction home in Kleinburg 🏗️ and decided to sell their current home on their own to save on commission 💸. They thought, “How hard could it be?”
The Reality:
Instead of attracting serious buyers, they were bombarded by real estate agents calling non-stop ☎️📩 trying to get the listing. Real buyers? Crickets 🦗.
When offers finally came in, they were lowball offers 🤏 because buyers saw them as vulnerable without representation. They also had no clear pricing strategy, no marketing plan, and no negotiation power ⚠️.
The Cost:
Their home sat on the market too long ⏳, and when their new home closed, they were forced to carry two mortgages, the home for sale in Vaughan and their new construction home in Kleinburg 💳💳—an overwhelming financial burden.
The Solution:
Eventually, they called in a trusted agent who stepped in with professional photos 📸, staging 🛋️, a pricing strategy 💡, and an aggressive marketing campaign 📣. Within 10 days, the home sold over asking ✅ and they were finally able to breathe.
The Lesson:
Trying to “save” on commission cost them months of stress and thousands in carrying costs. The right agent would’ve saved them both.
⸻
Real Life Example #2: Kleinburg Move Gone Cold with the Wrong Agent 🧊
The Situation:
A family upgraded to a stunning home in King City 🏡 and needed to sell their current home in Woodbridge. They hired an agent—but only based on a discounted commission offer 💵.
The Reality:
From the start, they felt the agent was disengaged. Communication was slow 📉, the marketing was minimal (poor listing photos, no social media reach, and no staging help), and the open houses felt rushed and unprepared ⏰.
The Result:
Their home sat on the market with little activity. Weeks turned into months. Eventually, frustration set in—they were still paying the new mortgage while the old home drained their finances 💔.
The Solution:
They switched agents. This time, they hired someone who understood the market, positioned their home properly, marketed it like a pro, and stayed in constant contact ✅. The home sold in less than 2 weeks.
The Lesson:
Discounted commission = discounted service. When you’re dealing with one of your biggest assets, cutting corners can cost you way more in the end. The right agent will always provide the value you need—and then some.
The Bottom Line: Choose an Agent Based on VALUE, Not Just Commission
The right real estate agent does more than just list your home—they maximize your return on investment.
📌 When choosing an agent, ask yourself:
✅ Do they have a clear, strategic marketing plan?
✅ Are they a proven negotiator who can protect my bottom line?
✅ Do they have the experience and skills to handle complex contracts?
A discount agent might save you a few thousand upfront, but a skilled agent can make you tens of thousands more on your sale price.
🚀 Ready to Sell? Let’s Get You the Best Price Possible!
If you’re considering selling your home and want a strategy designed to maximize your sale price, let’s chat!
📞 Contact Us today for a free home consultation!
📩 Let’s discuss how we can sell your home for the most money possible—without leaving thousands on the table.