Typical Real Estate Commission on Land Sales

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By Bailey Peterson Updated June 1, 2023


Things to know about buying or selling land | Do you need a realtor to sell land? | FAQ

How much is the typical real estate commission on land sales?

The typical real estate commission on land sales costs at least as much as the national average realtor fee, which is currently 5.37%. Half of that normally goes to your listing agent, half to the buyer's agent.

But you might have to pay a higher commission depending on your property type and estimated sale price.

For example, a realtor may charge as much as 8–10% if you're selling a lower-priced piece of land in a less desirable market. Selling farmland or a vacant lot can be more complicated and take more time than selling a traditional home because land buyers have more specific needs.

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 difficult. You'd have to market your property and navigate real estate laws on your own.

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 who charge a low 1.5% listing fee. You can see your agent matches for free and choose the best fit, or you can walk away anytime.

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  • Get a pre-negotiated 1.5% listing fee (half the typical rate)
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5 facts about realtor fees for land sales

1. Real estate commission on land sales is fully negotiable

While the average real estate commission rate is 5.37%, there’s no legally set rate for any type of real estate transaction. Realtor fees are 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 1.5% commission rate would save you $6,000 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 are typically responsible for both agents' commission fees, 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 in places where vacant land is cheaper, you might pay commissions as high as 8–10% 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 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 legwork that goes into that type of land. For example, land for mobile homes requires getting maps, septic information, and drainage information and testing out the well for water.

Plots for manufactured homes can be a lot cheaper than a property that's ideal for residential or commercial development. If the land price is as low as $50,000 or less and the plot is several acres, your agent may consider $5,000 a fair commission. 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, you’ll have to pay other standard charges for the real estate transaction.

For example, title companies charge for escrow services. They hold the funds and provide a venue for the closing. While the buyer sometimes pays this cost, sometimes it’s split or paid for by the seller when the market is competitive.

Other costs include the basic owner’s title insurance policy and the title search that’s usually required. These costs 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. For 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.[1]

A better option for budget-conscious sellers is to work with a low commission real estate agent. These agents provide the same service as traditional realtors but offer 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.

👋 Get free advice from a licensed expert

If you're looking to buy or sell a house and weighing your options, Clever can help!

Our fully licensed Concierge Team is standing by to answer questions and provide free, objective advice on how to get the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your basic info below. Our Concierge Team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

FAQ about commission on land sales

How much is the typical commission on land sales?

The typical commission on land sales varies from 5% to 10%, depending on the property's price, desirability, and usage. In many cases, agents charge the same rates on vacant land as other properties, which means broker fees are often comparable to the average commission rate in your state.

How can you save money on broker fees for land sales?

To save money on broker fees for land sales, you can try to negotiate a lower commission rate or list your property for sale by owner (FSBO). However, the best (and easiest!) option is to work with a discount real estate company that provides the full support of a traditional agent for a fraction of the cost. Find the top discount real estate brokerages.

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Article Sources

[1] Collateral Analytics – "Saving Real Estate Commissions at Any Price".

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