Find out how commission can influence the success of your farm sale.
You’ve decided to sell your farm. It’s a significant decision, full of emotions and expectations. Perhaps it’s land that has been in your family for generations or an investment that you’ve cultivated over the years.
Whatever the case, you want the sales process to be as smooth and profitable as possible. With this in mind, you contact one or more brokers to attract potential buyers.
At this point, one of the big questions in the rural real estate market arises: what should the broker’s commission be?
That’s the question we’re going to clarify today.
The Role of the Real Estate Broker in the Rural Real Estate Market
Some brokers may opt for a more basic approach, limiting themselves to publicizing the property and facilitating the negotiation. Others, especially real estate agents, offer a more complete service, which can include legal support, the production of promotional materials and advice throughout the sales process.
Relationship between Commissioning and Services Rendered
Commissions, which are only paid on successful sales, are what keep the brokerage “engine” running. They motivate brokers or real estate agents to strive to ensure that the property is negotiated for the best value and as quickly as possible.
In other words, commission is directly linked to the quality and depth of the brokerage services provided. Real estate agents, for example, may ask for higher commissions (between 4% and 6%) due to their greater structure and range of services, while a self-employed broker, not having the same capacity, may agree to work with lower commissions.
It’s important to remember that there is also a relationship between the risk and the potential reward for carrying out this work. The more you invest in selling a farm, the more you expect in return.
Commission: An Investment, Not a Cost
Commission may seem like an expense at first, but it’s more useful to consider it as an investment in the sale of your property. A higher commission can attract top brokers or real estate agents, increasing the visibility of your property and, consequently, the chances of a successful sale.
Once the sale is complete, the higher commission can be seen in a new light. With the property sold, you now have the freedom to invest the money from the sale in new opportunities. There are many investment strategies that can not only offset the cost of the higher commission, but also bring significant returns in the long term.
Here’s a practical example: at a time of high interest rates, the difference paid in a slightly higher commission (such as 6%) can be quickly recovered in investments that offer a return of around 1% per month, as well as generating financial gains in the medium and long term.
The Importance of Commission in the Rural Real Estate Market
When considering financial aspects and investment possibilities, it is essential to appreciate the importance of an adequate commission and integrate it strategically into the pricing process. A higher commission can serve as a powerful incentive for brokers and real estate agents, motivating them to dedicate more resources and effort to selling your property more quickly and under the best possible conditions.
On the other hand, keeping commissions low may result in less attention or priority being given to your property, as the professionals involved may feel less motivated to invest their time and resources.
Therefore, an adequate commission not only ensures a favorable environment for brokers, but also maximizes sales opportunities and guarantees a satisfactory result for everyone involved in the real estate business.
