10% realtor commission????

[mom2boys]

My brother is putting a piece of property up for sale. The realtor is charging 10% commision. This seems awfully high to me. She told him that is the going rate for undeveloped land. Does this sound right?

 

[zurgswife]

6% is the highest I've every heard....but I've never dealt with undevelped property...

 

[BobBrazeal]

That seems to be the going rate for undeveloped land. I've bought and sold a few lots. There are times that you can negotiate a better rate if there are a lot of realtors wanting to sell property in a particular area.

 

[Jeff in BigD]

It depends on the market. Here 6% is the rate.

I can ask my dad for more info though.

 

[Doctor P]

There are certain fixed costs to listing and marketing property. With undeveloped land, a higher percentage commission is often necessary to offset the fixed costs due to the lower value of the property relative to developed parcels.

 

[RoutemanDan]

Seems right to me.Undeveloped land and timeshares usually command a higher %.

 

[jipsy]

6% is the norm for single family, 10% for raw land, 4% for commercial property. All commissions are negotiable, but that must be done before signing the listing agreement.

Here's how the commission breakdown works: I am an agent and I work for ABC realty. I have an agreement with them that any property I sell, I get 60% of the commission and they get 40%. The 40% covers advertising, telephone, office space, etc. that they let me have.

I list your raw land and we agree to 10% commission. I sell it for you for $50,000. The check is made out to ABC realty for $5,000 and I get 60% of that. HOWEVER, if XYZ realty, John Doe sells the property, then the commission is split - $2500 to XYZ realty as the selling agency, and $2500 to ABC realty as the listing agency. I would get 60% of the $2500. John Doe gets whatever percentage he has worked out with his own agency - maybe they split it 50/50 or maybe he gets 100% of his commissions, and pays a monthly rental for office space, etc.

 

[ToyStory Fan]

Not too sure about undeveloped property, but 10% seems high. Even 6% has started to go by the wayside around here..no inventory and houses are sold within a couple of days. Additionally in the really high priced market over by Westchester Country Club (homes start at around $3MM there) the commissions are only around 2-3%...(but I'd still take that on $3MM)

 

[Talking Hands]

Yes this is the standard comission on land. It of course can be negotiated especially if it is a particularly large piece of property in an area that is properly zoned.

 

[mom2boys]

Thanks for the replies. I guess the 10% isn't totally out of line. It's only one acre and according to code, 5 is the minimum to build a home. However, since sewage and water run past the property, it is possible to get an exception. I will have to look into getting that done prior to placing it on the market. Don't know if the county will be as farorable to us if they know we want to sell.