Flat 6,500 on 40 acres, 1,700 of it out of my own pocket, happily

Closed on 40 acres of mostly wooded ground with road frontage, 240k, in a county two hours from where I live.

Compensation structure: flat 6,500 to my broker, agreed in writing before we looked at anything, payable at closing whether the seller's side contributed or not. The listing side eventually offered 2%, 4,800, and I wrote a check for the 1,700 difference at the table. Both lines showed on the settlement statement.

Why flat and not percentage: on 240k, 2.5% would have been 6,000, which is roughly the same money, so the rate wasn't the point. What I wanted was an agent who wasn't paid more for me buying more land. She pulled the zoning history back to a 2004 rezone, found a recorded access easement across the northeast corner that wasn't in the listing, and drove the parcel with me twice in mud season. On a percentage she'd have made 6,000 for that and 8,750 if she'd talked me into the 350k parcel next door, and I didn't want that math sitting in the room.

The part that nearly killed it: since compensation offers came off the MLS, there was no number to look at. The listing broker wouldn't answer verbally, so my agent sent a written request, and it took three days to come back. Meanwhile there was a second offer circling. If it had come back at zero I'd have owed the full 6,500 and I'd have paid it, but I'd have paid it while feeling much worse about my offer price.

What I'd keep: flat fee on land, every time. What I'd change: send the compensation request the same hour I decide I'm interested, not after I've decided I want it.

Answer

0wendy_park48CapitalPRO7

How was the flat fee documented? On the land deals I've read, the rep agreement says a percentage and then somebody staples an addendum on top that says something different, and the title company follows whichever paper reaches them first.

Also curious whether your agreement said the seller-side contribution reduces your obligation dollar for dollar, or whether it said the broker keeps whatever the seller pays plus the flat amount. Those two read almost identically on a first pass and differ by 4,800 on your deal. The easement find is the part I'd pay for twice, by the way. Recorded access across a corner is the kind of thing that shows up when you go to subdivide in nine years and by then nobody remembers.

3 replies

1ehernandez74PO2BPRO5

What would you have done if the answer had come back at zero and you were still in a competing offer situation? You say you'd have paid it, but would you have cut your offer by 6,500 to fund it, and does that just lose you the parcel to the other buyer? I ask because that's the branch I keep getting stuck on and I don't have an agent yet to ask.

3derekj19SB1B

Would agents generally take a flat 6,500 on land, or did you get lucky with someone who likes the work? Every agent I've talked to in a rural county treats land as a favor they do between house closings, and I can't tell if a flat fee makes it more attractive to them or less.