The November LANDTHINK Pulse revealed 18.23% of respondents are willing to pay a real estate agent only 3% commission to sell their land. This comes as quite a surprise, since a 6% commission split between listing broker and selling broker is the customary rate for agents concentrating on residential real estate. Real estate agents specializing in land sales or commercial properties usually garner higher commission rates (6% to >10%), given the complexity of these types of transactions, customized service, and the scope of their work. Adept land agents are expected to know the intricacies of zoning, easements, construction, wells, septic systems, wetlands, and much more.
Sellers certainly don’t have to recruit the services of a real estate broker when selling their property, but a skilled land agent will provide a multitude of important services for the seller such as marketing, advice during negotiations, and guidance through closing procedures. The seller will almost always get money spent on commission back, and then some, because hiring an agent boosts the seller’s chances of attaining a higher price for the property. Nearly every real estate transaction has some complications, and a skilled, productive agent is worth every penny. There is no set amount that a broker will charge and the commission rate is always negotiable.
Last month, the November Pulse asked: How much commission are you willing to pay a real estate agent to sell your land?
The LANDTHINK audience certainly expressed mixed views on commission rates, as our informal online survey revealed. The results were all over the board, but the largest percentage (18.23%) indicated that they would be willing to pay a real estate agent 3% to sell their land, followed closely by 16.52% of our audience, who indicated they would be willing to pay an agent 10% commission to get their land sold.
Here’s how the results panned out:
- 18.23% said they would pay 3%
- 16.52% said they would pay 10%
- 14.81% said they would pay 6%
- 13.96 % said they would pay 5%
- 8.26 % said they would pay 4%
- 8.26% said they would pay 8%
- 4.84% said they would pay 1%
- 4.84% said they would pay 2%
- 4.56% said they would pay 7%
- 2.85% said they would pay >10%
- 2.56% said they would pay 0%
- 0.28% said they would pay 9%
Thank you to everyone who participated and shared the Pulse with friends and connections in the land industry.
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Excellent article.
Realtors should read the book “Who Moved My Cheese”. Todays buyers and sellers are more savvy. And much of the information we need is available online or thru county tax offices.
So say on a $250,000 land sell, why would anyone pay $25,000 to have you do an open house, hang out a sign and put a listing on your website.
I suspect that the real estate commission will trend downward and that those who can really add value will be able to establish a market to charge “Consulting Fees” that will make them earn their keep.
I’m not a realtor — nor have I played one on tv
Commissions need to reflect the cost of selling. Flyers with sign does not sell land! Extensive knowledge of the land, regulations, county and state rules for development must be known. Extensive advertising is mandatory, plus personal sales calls to prospects! Land is in far less demand than a house. Thus, more time, more money is required!