Real Estate Sales Commissions
land listings and auctions
We find that most of our clients first question is "what do you charge for auctioneer commission". We can understand why thats an important question so we wanted to put it right here where you can learn about auctioneer and brokerage commissions for DreamDirt to sell farm & land real estate for you.
We promise we'll get to the answer but want to lay out a few important details about commissions first because these things have an affect on what commission you are charged. First we sell farms and land 2 different ways.
- Listings: The first is by auction and the other is by listing. We often refer to listings as Real Estate Brokerage, Privately Negotiated Real Estate, Accelerated Listings or just listings.
- Auctions: These are referred to as Auction Listings, Live Auctions, Online Only Auctions, Simulcast Auctions, Accelerated Listings, or Seller Directed Auctions. It seems complex that there are so many options to sell real estate and while commissions are similar they aren't always the same. In other words we don't have just 1 fee we charge for everything because service costs of differently in advertising, manpower, research and travel.
"For DreamDirt the biggest influencing factors of commission rates is the size of the property and the expected value."
Secondary to that is the amount of work the seller expects us to perform, how much advertising is necessary, how long it will take to sell and the investment necessary on our part to accomplish a sale for the seller. Obvioulsy the more we are expected to do for the seller the higher the commission we charge.
Private Listing Commission Fees
Real Estate Listings or Brokerage
This is when we list a property and invite buyers to make offers. We cooperate with other brokers to sell these farms. We may list the farm and represent the seller but another brokerage may have a buyer and represent the buyer in their offer. As the farm listings go on the market they are put into an MLS where many agents will see it and contact interested parties and try to sell it. In this scenario you are paying 2 brokerages to cooperate to sell the farm. For listings we typically charge between 4% and 7% real estate commission again depending on the amount of work required and size of the farm.
Farmland Auction Fees
Auctioneers Commissions for farm and land real estate are typically between 1% and 5% depending on several factors. Its important to know that with a farmland auction the commission can be paid by the seller or the buyer. We leave that choice up to the seller. In many cases sellers will split the commission fee with the buyer using a Buyers Premium.
With an auction, regardless of the type of auction you are typically only paying the auction company rather than 2 brokers to sell the land and for this reason the fees are lower. This isn't always the case but you have the option to control it. When you hire an auctioneer you can actually choose to pay additional commission to compensate a buyers agent that introduces a buyer to the auction but that fee is in addition to what we've quoted here and up to you. Sometimes this can be a good idea especially on land properties that are very large or unique in some way or that have a home.
At DreamDirt we let the seller decide whether they want to pay additional commission to any buyers agent that registers a buyer. It is not necessary and we can help guide you to the right decision based on your property.
Auctioneer Commissions can vary based on the type of auction you choose to have.
Live Auctions with simultaneous online bidding and full advertising is our most popular marketing product for farmland auctions. You can look at this as the full plate of auctioneer and settlement services for your farmland real estate transaction.
The opposite end of the spectrum is Seller Directed Auction is the cheapest commission rate for a seller because it requires less effort on our part. In this type of auction we will only be conducting the auction and providing minimal advertising which is to put the property in our online databases such as MLS, subscription services and an entry on DreamDirt.com. This type of auction is like a For Sale By Owner but you use our services to conduct the auction. This has been used by some family farms but often Attorney's, Banks and other real estate firms.
In the middle of the road options that blend various levels of our advertising and services we offer Online Only Farmland Auction which represents a discount from a Live Auction but costs more than a Seller Directed Auction. These auctions are becoming the future of farmland auctions and we've very successfully used online auctions to sell parcels of farmland for top of the market prices. This auction type takes all of the bidding to our website. It gives bidders longer to make decisions about bidding with bidding lasting up to 30 days.