Commission Rates on Land Sales in Real Estate (2024)

Commission rates on land sales typically range from 5–10% of the sale price.^[1] That’s much higher than the average of 5-6% for home sales nationwide.

Much of that higher price is that land typically sells for less than a home, so real estate agents must charge a higher percentage to keep their compensation fair. Selling certain types of land can also take longer and generally be more complicated, further driving up commission rates.

In this article, we’ll break down commission rates for land sales and explore what factors affect them.

» JUMP TO: Who pays commission? | NAR settlement | Full breakdown

Who pays commission on land sales?

Most real estate transactions, including land sales, involve two agents: one for the seller and one for the buyer.

Traditionally, the seller pays the commissions for both agents, and this arrangement has also applied to most land sales. This may change soon (and we’ll discuss that in a minute), but for now, sellers should expect to cover the full commission amount.

The average rate of land sales is around 5–10%, compared to the national average of 5-6% for home sales. The variance can come from several factors, including the price of the land, the type of land (farmland or commercial land might be a harder sell than residential land, for example), and access to infrastructure.

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Important: NAR settlement changes

In 2024, the National Association of Realtors (NAR) settled to address claims made on behalf of home sellers regarding broker commissions.^[2] Since this settlement, listing agents can no longer share buyer’s agent fees—including on land sales.

This requires buyers (and their agents) to negotiate fees upfront, whereas previously, the seller set the buying agent’s commission.

Ultimately, that likely means more room for buyers and sellers to negotiate the amount they pay their agents.

That said, it's important to discuss commission rates openly and compare rates across different realtors. These aren't small fees; transparency is necessary to ensure you get the best balance of service and price.

Real estate commission on land sales: A breakdown

Sellers and their agents determine the listing agent's fee before listing the property. Following the NAR settlement, buyers and their agents negotiate their fees directly before viewing properties.

However, in many cases, sellers are still expected to cover the buyer’s agent fee, which is split between the agents and their brokers.

Land commissions are generally higher than those on a home or other property. Land is often priced lower and can be tougher to sell. The exact percentage of the land price that gets paid as commission can vary quite a bit, depending on several factors:

• Land price. Land is usually less expensive than property, meaning a realtor needs to charge a higher percentage of the price to make the same amount. The lower the price, the higher the commission percentage you can expect.
• Type of land. Empty land can attract a smaller market than a prebuilt property, and certain types of land, such as farmland, can further narrow the market. This often means either longer times on the market or more work for the realtor, driving commission up.
• Infrastructure and legal complications. Land sales can also involve additional complicating factors, such as access to utilities, environmental restrictions, and zoning issues.^[3] This can mean more legwork agents require, again driving up commission rates.

Real estate commission example

Let’s say you sell a piece of land for $100,000 with an 8% commission, totaling $8,000. If the commission is split evenly between the seller’s and buyer’s agents, each agent would receive $4,000. After their brokerages take a 30% cut, each agent ends up with $2,800.

Considering how long land can stay on the market, $8,000 in commission may seem low. To address this, some agents and brokers opt for flat fees on land sales rather than a percentage. For instance, they might charge a flat $10,000, regardless of the land’s selling price.

The bottom line

Typical commission on land sales is 5–10% of the land’s selling price, which can be much more than the average commission on home sales. These higher commission rates are intended to offset the lower selling prices and smaller markets for most pieces of land.

Several factors influence the commission rate on land, including the listing price, the type of land, access to infrastructure, and legal complications. Generally, lots that are lower price, more niche, and require more work from the realtor will have a higher commission rate.

Try our commission calculator if you’re wondering how much you’ll pay in real estate commissions. It can help give you an idea of what you’ll pay in realtor fees before you get to the closing table.