Farmland Auction Commission Rates

Nov 12, 2019 | About DreamDirt

A photo of a land auction sign on a fence.
With many years in the industry, we’ve received a wide array of questions from potential clients. We find that most of our clients’ initial question is, “What do you charge for an auctioneer commission?” We realize the importance of this question when selecting an auctioneer for the sale of your farm. In this blog, you’ll learn about DreamDirt’s auctioneer commissions to sell a farm, farmland real estate and even farm equipment or machinery for you!

First, to be completely fair and avoid any confusion or ambiguity, DreamDirt charges commission only. No hidden fees, period! We do not charge closing fees, advertising fees, or per bid fees. Because of this, our auction commission is much more of a value to our customers. In fact, many times our farmland auctioneer commission is the most competitive in the market for these services. Additionally, DreamDirt is not a general auctioneer; rather, we are a specialized farmland auctioneer company. Thus, the resources you are getting from paying us commission allows us to take the measures necessary to maximize the value of your land.

Now, there certainly is no pressure to utilize this method, but when clients elect to use our online auction platform there are many benefits. We feel they not only are using an optimal environment for the most aggressive bidding, but also they are eliminating additional expenses that come with a live auction such as venue costs, refreshments, insurance and travel. Customers using our online farmland auction platform will find we are able to charge an even lower commission (for an equal, if not better auction experience) without those added expenses.

Typically, we charge commission as a percentage of a sale; but, we can also set up commission structures with caps on them or with just a basic flat fee. Our commission is negotiable as we want our clients to feel comfortable. More importantly, we want our commission to be a fair representation of what we deliver and not a windfall. Our main goal is for our clients to realize MORE value from paying a commission and we believe that paying experienced auctioneers will result in a higher net to the seller even after paying commission. We believe our commission also helps relieve sellers of stress and ensures that your farm auction is done RIGHT. The easiest way to explain it is this: think of paying commission sort of like paying for insurance. You get a piece of mind that all the bases are covered and, in the end, you walk away satisfied everything is proper and there are no lingering concerns or fears.

We want you to have a full grasp on how our auctioneer commission structure works, so we’ve broken it down into separate sections based on scenarios that may apply to you!

Farmland Auction Fees

Auctioneer Commissions

Auctioneers Commissions for farm and farmland real estate are typically between 1% and 5% depending on several factors.

To start, it’s important to know that with a farmland auction, the commission can be paid by either the seller or the buyer. DreamDirt does not charge a buyer’s premium unless our client directs us to. We elect to leave the option open to the seller to decide if they wish for the commission to be paid “from the bid” – which is a seller’s commission, or “in addition to the bid” – which is a buyer’s premium. Any combination of the two that still achieves our stated commission is acceptable. For example, if our commission is 1%, a seller may decide to pay half, and have the buyer’s premium set to pay half. In many cases sellers will split the commission fee with the buyer.

With an auction, regardless of the type of auction, you are typically only paying the auction company rather than two brokers to sell the land resulting in lower fees. 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 hiring a buyers agent that introduces a buyer to the auction but that fee is an additional cost. Depending on the scenario, there are many benefits to hiring a buyers agent! To read more on that topic, click here. At DreamDirt, we let the seller decide whether they want to pay additional commission to any buyers agent that registers a buyer. No matter your decision, we will help guide you through the process.
Auctioneer Commissions can vary based on the type of auction you choose to have.

  1. Live Auctions with Simultaneous Online Bidding: This is our most popular option for farmland auctions. You can look at this as the “full plate” of auctioneer and settlement services for your farmland real estate transaction. This option also includes full advertising and marketing of your farm property.
  2. Seller Directed Auction: The opposite end of the spectrum and 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 Multiple Listing Service (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 more often by attorneys, banks, and other real estate firms.
  3. Online Only Farmland Auction: This option blends various levels of our advertising and services we offer. You can view it as 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 farm 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.

Online Farm Equipment Auction

 

FarmBid Auction Commission

 

Our commission fee for this type of auction is around 4%.

 

DreamDirt’s FarmBid auction is the easiest and most effective way to sell farm machinery and equipment online. FarmBid is a perpetual never-ending farm equipment auction that breaks out of the typical auction framework. Each item is considered it’s “own auction” – sellers get item-level advertising for their pieces of machinery, equipment can be listed quickly, and bidding can start same-day!

We advertise each item individually in order to ensure sellers the highest level of exposure, but we schedule items to close in groups on Thursdays at 2PM in order to ensure consistent and competitive bidder participation. We have found that 10-14 days on the FarmBid auction gives sellers excellent results. When the item sells, sellers get paid quickly, and buyers are expected to pick up the items directly from the seller once we have collected the payment. FarmBid is supported by a full-time staff of assistants and marketing professionals to help our Affiliates and Representatives do more selling and less administrative work!

Personal Property Auctioneer Commissions

Personal property includes

  • Farm/ Heavy Equipment/ Vehicles
  • Livestock
  • Hay or other farm crops
  • Any personal belongings
DreamDirt offers many options for selling anything farm related. There is not one standard answer as to how you should sell something, but we offer a solution for every imaginable situation. For instance, you may have just one item to sell or an array of items. Or, you may be interested in an off site auction. Regardless, the marketing options are endless! DreamDirt’s auctioneer commission fees for selling items can vary based on the amount of items we are selling for you along with the level of advertising necessary. Typically our commission rates follow the following schedules but can be reduced even further when sold in conjunction with real estate. We offer very attractive rates especially for farmers that are selling real estate and farm equipment.

Onsite Estate Auctions of Farm Equipment 3% to 8%

Onsite Farm Retirement 3% to 8%. (We offer discounts to farmers offering both real estate and machinery)

 

Online only Farm Equipment Auction 3% to 8% commission

Private Listing Commission Fees

As mentioned before, real estate or brokerage listings are simply when we list a property and invite buyers to make offers. We cooperate with other brokers to sell these farms. For example, DreamDirt 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 Multiple Listing System (MLS) where many agents will see it and contact interested parties and try to sell it. In this scenario you are paying two brokerages to cooperate to sell the farm. For listings we typically charge between 4% and 7% real estate commission depending on the amount of work required and size of the farm.

Free Farmland Auctioneer Commissions Quote

We are ready to secure the best price for your farmland property, equipment or machinery! DreamDirt auctions work – and we are ready to work for you to have your farm auction done RIGHT!

Contact Us
Jason Smith

Jason Smith

CAI Auctioneer, Land Broker

Founder, Auctioneer, Broker, and Agent at DreamDirt, Jason Smith is a lead farm real estate professional in the Midwest. He has achieved the pinnacle of auction education earning the CAI designation and is one of only 11 CAI auctioneers in Iowa. Jason graduated from the World Wide College of Auctioneering, and has achieved the PRI designation from the Professional Ringmen Institute. Jason and his wife founded DreamDirt in 2005, and the company continues to be a leader in the farm auction space and prides itself in offering extensive land seller and buyer information.

Email: jason@dreamdirt.com | Phone: (515) 537-6633

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