If you're selling or buying land, real estate commission is typically one of the most expensive closing costs you'll encounter.
Real estate commission on land sales can vary significantly depending on your property type and estimated sale price. After all, selling farmland or a vacant lot can be more complicated — and take more time — than selling a traditional home because land buyers have much more specific needs.
That said, you should expect the broker fee for a land sale to cost at least as much as the typical commission rate, usually 5-6% of the sale price. Half of that normally goes to your listing agent, half to the buyer's agent.
If you want to keep more in your pocket when you sell, your best bet is to work with a low commission company like Clever Real Estate. Clever matches you with top local realtors AND pre-negotiates discounted listing fees of just $3,000 or 1%. Compare agents, choose the best fit, and save thousands on broker fees!
How much is the typical real estate commission on land sales?
The typical real estate commission on land sales is often the same as the average realtor fee, which is currently 5.50% nationwide.
However, broker fees on land sales can sometimes cost a lot more than the typical rate. On a lower-priced property in a less desirable market that will be harder to sell, realtor commission could add up to as much as 8-10%!
Since real estate agents often charge higher commission rates on land sales, many sellers attempt to save money by listing their properties for sale by owner (FSBO). But unless you're a developer or already have a buyer lined up, selling your own land can be incredibly difficult. You'll have to market your property, navigate real estate laws in your state, and more.
Luckily, selling DIY isn't the only way to avoid paying expensive realtor fees. Some discount real estate companies, like Clever, offer built-in savings that make selling vacant land surprisingly affordable — without the hassle of a FSBO sale.
1. Real estate commission on land sales is fully negotiable
While the average real estate commission rate is 5.50%, there’s no legally set rate for any type of real estate transaction. Realtor fees are 100% negotiable whether you’re selling a house, a vacant lot, or several hundred acres of farmland.
If you're looking to negotiate a lower commission rate on a land sale, you're more likely to be successful if you're:
- Selling an expensive property
- Listing several properties with the same agent
- Selling in a high-demand area
- Flexible on pricing
- Willing to show buyers the property yourself
- Prepared to walk away if the agent won't negotiate
Negotiating realtor fees yourself is challenging, but it can save you thousands if you're able to score a big discount.
For example, if you sold a tract of farmland for $400,000, negotiating a 1% commission rate would save you $8,000 compared to the 3% listing fee many land brokers charge!
2. Broker fees on land sales are still split
Even though you’re not dealing with a home sale, there are usually still two separate agents:
- The listing agent represents the seller and markets the property to buyers
- The buyer's agent represents the buyer
Sellers typically bear the responsibility of both agents' commission fees on land sales, which could fall between 5% and 10% depending on the property.
3. The type of land may affect your rate
Since broker fees for land sales aren’t set in stone and are fully negotiable, the type of land and the level of service matter. In southern U.S. states and places where vacant land is cheaper, you might pay commissions as high as 8% to 10% on a building lot or smaller tract of farmland.
If it’s a buyer’s market, consider subdividing the property before you sell. It could be more lucrative to make several transactions rather than to sell the full plot to a single buyer. An experienced local agent can help you determine whether you'll maximize your profit by subdividing your land or selling it as a single parcel.
4. Broker fees for land sales go up on special use
When commissions on land go as high as 10%, it’s usually because of the kind of legwork that goes into dealing with that type of land. For example, land for mobile homes requires getting maps, septic information, drainage information, and testing out the well for water.
Plots for manufactured homes can also be a lot cheaper than a property that's ideal for residential or commercial development. If land prices are as low as $50,000 or less, and the plot is several acres, your agent may consider $5,000 a fair commission for the work involved. After splitting that fee with the buyer's agent, they may walk away with $2,500 or less.
5. Standard closing costs still apply on land sales
In addition to realtor commission, don’t forget that you’ll still have to deal with other standard charges that go along with any kind of real estate transaction.
For example, title companies charge you for escrow services. They hold the funds and give you a venue for the closing. While the buyer sometimes pays the costs here, it’s split in some instances or paid for by the seller when the market is tightly competitive.
The basic owner’s title insurance policy and the title search that’s usually required need to be handled. They go hand in hand with escrow charges, so if you’re the buyer, expect to pay for these charges out of pocket.
Depending on the state you’re buying or selling land in, you might also have to pay transfer taxes, which are just a fraction of a percentage of your overall cost. As an example, if you sell a $1 million tract of farmland and transfer taxes cost $1.50 for every $1,000 of property value, you'd owe an additional $1,500 at closing.
How to calculate the total cost of selling land
To estimate you much it will cost to sell a parcel of vacant land, use the cost to sell calculator below:
Should I use a realtor when selling land?
Yes, although real estate commission on land sales can be expensive, working with a realtor is still worth it for most sellers.
No matter what type of land you're selling, an experienced agent has the skill and industry connections to market your property to the right pool of potential buyers.
Listing your land for sale by owner can be tempting, but it rarely pays off in the long run. Research shows that after all the extra work involved with selling DIY, the average FSBO seller walks away with less cash, despite "saving" on listing fees.
A better option for budget-conscious sellers is to work with a low commission agent. The top discount real estate companies provide the same service as traditional realtors, but offer much more affordable rates. This increases the likelihood that you'll find a buyer quickly AND walk away from your sale with as much money as possible.
FAQs about commission on land sales
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