While there is no one-size-fits-all answer, being informed about the average realtor commission for selling land can provide a foundation for negotiation and decision-making. Like most purchases in life, the cheapest option is not necessarily the best value, so it’s important to understand what you need to look for in a realtor to sell your land to make sure that you get the most you can from your sale, all while enjoying as stress-free of a transaction as possible. The realtor who’s willing to slash his commission to nothing and is rarely worth even what they are getting. In this article, we’ll help you understand what you should be getting for your commission and what is typical accounting for differences in various markets.

Who Pays the Commission on a Land Sale?

It’s important to understand that EVERYTHING is negotiable in a real estate transaction. There are no laws governing who pays the commission on a land sale. That being said, in almost all transactions, the seller pays the listing agent a commission, with which the listing agent pays the selling agent an agreed-upon split.

What is a Typical Commission on a Land Sale?

What percentage do most realtors charge for land? This is a question I commonly see and the answer is, “It depends.” Realtors charge a commission based on several factors. The region in which they operate, the type of land they sell, the total price of the land they sell, the condition of the land they are selling, and the level of competition in the area can all drive commissions up or down. A farmland sale commission is going to vary regionally and may differ from a timberland sale commission. In general, due to the complexity of marketing, advertising, and showing a piece of land, a typical commission on a land sale ranges up to 10%. I’ve heard of commissions higher and lower, but those are the outliers, not the norm.

Why the Typical Commission on a Land Sale May Skew Higher

While residential commission may typically be in the 6% range, there are several factors why a land sale commission may skew higher. Let’s look at each of these so that you can have a better understanding of how your property stacks up. In no particular order, here are the factors that realtors must consider when setting their commission to ensure that they earn enough to provide quality service and fetch as much as possible for the landowner.

The Scope of Work

Some properties are easier to sell than others. A property located in a popular neighborhood, with good soil, that has been properly maintained is going to be easier to sell than a property that has challenges such as being more remote or needing a lot of pre-sale / post-sale rehab to get it into top condition. Realtors have to take these types of factors into account because while these properties can still be sold, they will be more of a challenge both in time spent and effort. They may require more visits to the property, more showings, and just more involvement from the realtor in general. For this reason, realtors will need a higher commission to give these properties the attention they need to complete the transaction.

The Price of the Property

At some point, there is only so much you can do to sell a property. While that list is extensive, it does have a cap. As listing price increases or decreases, a realtor may need to charge a higher (or lower) commission depending on this. Take for example a property that lists on the low end of the scale. In a lot of respects, to command top dollar for a property like this, a realtor is still going to have to do the same amount of work as they would on a more expensive property. With that being the case, a higher commission is generally warranted. 

On the other end of the spectrum, consider a higher-priced property. You might think these properties would always list for a lower commission, but that is not always true. If the landowner is asking above the market price for the property, the realtor will take this into account because they know this property will take longer to sell and may require price reductions. Alternative to this, a property that has a “high” listing price, but is appropriately valued will also have a smaller buyer pool and require niche marketing to reach them.

Are there any Realtor Fees for Land Sales?

Realtor Fees depend on the brokerage and the property being sold. Commissions make sense on properties with higher values, but on very low-priced properties a flat fee may make more sense. A realtor should disclose any fees they charge to you. There are several questions you should ask a realtor when selling land, and this is one of them.

The Commission on Land Sales Shouldn’t Be the Total Focus

There are many factors that will drive a commission on land sales up and down. Like many things with land, it always depends on the specific tract and its characteristics, there are rarely any “rules of thumb.” Most who are focused on the commission are really concerned with what they are going to net from a sale, so a better use of that brain power is to determine what the realtor is offering in terms of marketing, advertising, and communication during the sale to make your decision. 

If your realtor is willing to slash his commission the minute you ask, how do you think they are going to advise you to act when it comes time to negotiate the sale of your property? If your realtor places their marketing, advertising, and communication at the bottom of the competition, what kind of service do you think you are going to get?

Going with the cheapest commission is not always going to result in the most net proceeds from your sale. If you are comparing commissions, make sure that what you are getting in return is an apples-to-apples comparison as well. Be sure you take a holistic view of the transaction into your assessment, and the average realtor commission for selling land should only be one component of that analysis.