Are you wondering about the real estate commission as a buyer or seller? The percentages can vary depending on the complexity and size of the land transaction. 5000 acres of ag land may be a smaller and easier deal than 5 acres of prime commercial land.
For example, if a developer is purchasing land to build homes and resale, the agent may negotiate a different number on the land sale and build in a guarantee listing on the resale of the homes at a different rate. It all depends on the scope of the project.
Have an amazing day!
There are a number of differences between land sales and home sales that take extra thinking regarding broker compensation. For example, if the land is being purchased for development, escrow may take over a year while the buyer secures entitlements. In these sales, there are often option fees or non-refundable deposits that pass through to the seller after the first 60 to 90 days. Should the listing broker receive a commission on those fees or deposits since they stay in the seller's pocket even if the sale falls out of escrow? Should the listing broker receive a bonus if they maximize the amount of these early fees?
There are a number of factors to consider in deciding on the number.
Onr large factor is the amount and quality of service that is expected. For example how much marketing is expected by the seller and what quality of marketing is expected?
For example in a large land transaction, this could be land for a ski resort, a development for a vacation resort, a large commercial shopping center or large residential development, or a large commercial farm. The marketing for each one of these end uses will be very different.
The market, or potential buyers need to be identified. For example will they be end users, consumers or will they be commercial developers. We will need to identify what are the best sources of communication to reach the target market. For example is television, radio, magazine, newspaper,direct mail, internet, or some other method or methods the best way to reach the target market?
If the target market is end consumers for a ski resort or a lakefront vacation resort, the marketing materials and the methods of communication with the target market will be very different than if the target market is commercial developers.
The cost, the time and the effort that is necessary for that marketing will have a wide range of cost in both terms of time and money, particularly depending on what level of service is desired and expected. .
The amount of the brokerage fee that is expected will vary accordingly.
For more information you may reach me at my cell phone: (408)509-6218
Charles Butterfield MBA
Real Estate Broker/REALTOR
Cell Phone: (408)509-6218
Email Address: firstname.lastname@example.org