Commission to sell land?

Question

I want to sell a land and the agent mentioned he would take 5% (2.5% for buyer/ 2.5% for seller). If he represents both, he would take 4%. Is it fair? Any other suggestion to negotiate the agreement with the agent commission?

The land will be a particularly difficult one to sell and I want to make sure he remains aggressive at selling it.

Joel Owens · Answer

I wouldn't care about the commission. I would care about having a broker/agent with the experience to know the highest price and the best use for your land and how to connect with that buyer.

Focusing on the commission is stepping over dollars to save pennies in my opinion.

4 percent is really low. I won't even look at land on the commercial side for less than 10% total because I know the work involved getting it to closing versus an existing building with cash flow already in place.

So focus less on the commission and more on what the broker/agent can do for you. Back when I did land I would tell them my fee on the phone. If they balked I didn't even give them the time of day. Most agreed to what I wanted as they saw value in my knowledge and experience.

Hope it helps some.

Jay Hinrichs · Answer

@Joel Owens

@Marc Dufour

Mark for years at least until 1990 10% was the going rate for land deals. so 5%  in my mind is a deal.. land takes much longer to sell normally.. In my day of selling land in a 15% to 18% interest environment it could take years to sell a listing I routinely would not take listings for less than 15% and went as high as 25%..... I always double ended my deals.. in those days MLS was in its infancy so you had to spend major bucks in advertising to sell land.

And on top of that I would sell for 10% down give the seller the 10% and I would take the monthly payments until my commission was paid.. Say I made 5k or so I would get the first 5k of the seller carry back.. I had such a good residual income coming in during the middle 80's because I got creative and made deals. work..99% of agents would say hey I need to be paid at closing I cant take commission over time, Me I just banked these to the point were my residual income was ridiculous.. I only sold owner occ properties with owner carry terms. I would not even deal with anyone that need to be cashed out or get a loan. So I could advertise owner carry interest at 8% when market was 15 plus. I would advertise 10% down and give the seller 100% of the proceeds so to the seller it was like getting 20% down and they did the deal because they got cash.. AVerage payment ( this is CAlifornia was 500 a month) I would get the payment for 2 to 3 years.. so after a while I had a nice 7 to 10k a month coming in residual. when agents were starving in those days.

Jon Klaus · Answer

That's not a bad commission deal. However, just the commission won't necessarily make him all that motivated to aggressively market the land. Land can attract very few buyer and be on the market a very long time. Before you list, why don't you check the tax records to see who all the owners are of contiguous land. Offer it to each of them.

Wayne Brooks · Answer

What price range?  That 5% sounds on the low end.

Commission to sell land?

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