EVIDENCE BY NUMBERS

*The Lifetime Value of One Loyal Client is $125,789

Conservative Assumptions:

  1. First-time home price: $300,000
  2. Age 35
  3. Commission rate: buyer/seller sides: 2.75%.
  4. Home appreciation rate: 3% per year.
  5. Timeline:
    • First home: Buy only.
    • Next three moves: Sell and buy.
    • Final home: Sell only.
  6. Time between moves: 10 years.

Calculation:

1. First Transaction, Age 35 (Buy only):

  • Purchase price: $300,000.
  • Commission on purchase: $300,000 * 2.75% = $8,250.

2. Second Transaction, Age 45 (Sell and Buy):

  • 10 years of 3% appreciation on first home: $300,000 * (1.03^10) = $402,577.
  • Sell commission: $402,577 * 2.75% = $11,071.
  • Purchase of second home (with 3% appreciation): $402,577.
  • Buy commission: $402,577 * 2.75% = $11,071.
  • Total for second transactions: $11,071 (sell) + $11,071 (buy) = $22,142.

3. Third Transaction, Age 55 (Sell and Buy):

  • 10 more years of 3% appreciation on second home: $402,577 * (1.03^10) = $541,833.
  • Sell commission: $541,833 * 2.75% = $14,400.
  • Purchase of third home (with 3% appreciation): $541,833.
  • Buy commission: $541,833 * 2.75% = $14,400.
  • Total for third transactions: $14,400 (sell) + $14,400 (buy) = $28,800.

4. Fourth Transaction, Age 65 (Sell and Buy):

  • 10 more years of 3% appreciation on third home: $541,833 * (1.03^10) = $729,195.
  • Sell commission: $729,195 * 2.75% = $20,053.
  • Purchase of fourth home (with 3% appreciation): $729,195.
  • Buy commission: $729,195 * 2.75% = $20,053.
  • Total for fourth transactions: $20,053 (sell) + $20,053 (buy) = $40,106.

5. Fifth and Final Transaction, Age 75 (Sell only):

  • 10 more years of 3% appreciation on fourth home: $729,195 * (1.03^10) = $981,503.
  • Sell commission: $981,503 * 2.75% = $26,491.

Total Lifetime Commission:

  • First transaction (buy only): $8,250.
  • Second transaction (sell and buy): $22,142.
  • Third transaction (sell and buy): $28,800.
  • Fourth transaction (sell and buy): $40,106.
  • Fifth transaction (sell only): $26,491.

Grand Total:

$8,250 + $22,142 + $28,800 + $40,106 + $26,491 = $125,789.