A cash land buyer’s offer typically comes in below what an agent might list your land for: the buyer is pricing off resale math, the agent off market value minus commission and time. The real question isn’t which number is bigger, but what each path costs you to actually get there.
How Much Less Does a Cash Land Buyer Typically Offer?
A cash land buyer prices an offer by working backward from what the parcel should resell for, then subtracting the profit and cushion the buyer needs for the deal to be worth doing, the same logic behind the wholesale real estate formula known as the Maximum Allowable Offer, or MAO.
According to BiggerPockets, the standard version of that formula is MAO = 70% × ARV (after-repair value) minus repair costs minus the buyer’s fee, so a house worth $100,000 fixed up, needing $20,000 of repairs, supports a maximum offer around $50,000 before the buyer’s fee is subtracted. That formula was built for houses that need renovation before resale. Land usually doesn’t; there’s no kitchen to gut or roof to replace, so the repair-cost line in the formula often drops to zero.
What replaces it is uncertainty about the resale itself. A house has a large pool of owner-occupant buyers and a deep bench of comparable sales an appraiser can pull from within a few blocks. A parcel of raw land, especially rural or recreational ground, may have a handful of realistic buyers in the whole county and comps that are years old or miles away. A buyer pricing an offer on land has to build a bigger cushion into that offer for exactly that unknown: how long the resale will take, how many buyers will actually want this specific parcel, and what it costs to carry the land, in property taxes and holding costs, while waiting to find out. That cushion is why a land offer can land well below what the house-flipping formula described above would allow on some parcels, and much closer to full value on others; it moves with how marketable the specific parcel is, not with a fixed industry rule.
What Does the NAR Price-Gap Data Actually Show, and Why Doesn’t It Map Onto Land?
The most-cited price gap in real estate comes from the National Association of Realtors’ annual survey of recent buyers and sellers, which found that homes sold without an agent went for tens of thousands of dollars less than homes sold with one, but that comparison was built to measure houses, and a big chunk of the gap disappears once you look at who the FSBO buyer actually was.
According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, published in November 2022, homes sold For Sale By Owner (FSBO) went for a median of $225,000, against a median of $345,000 for agent-assisted homes, a gap of roughly 35 percent. But the same report notes that 50 percent of FSBO sellers already knew the buyer of their home, frequently a relative, friend, or existing tenant. A sale to someone you already know, often at a price set by the relationship rather than the market, is a different transaction than a sale to a stranger, and it pulls the FSBO median down for reasons that have nothing to do with marketing reach or negotiating leverage.
That distinction matters here because a cash land buyer isn’t the land equivalent of an FSBO seller. FSBO means the owner sold with no professional involved at all. A cash land buyer is a company on the other side of the table, pricing an offer to its own formula, the way the Maximum Allowable Offer framework described above works. It’s also worth being direct about what this study is and isn’t: it covers houses, not vacant land, surveyed for the 12 months ending June 2022. Land markets, especially rural and recreational land, have thinner comparable-sale data and a smaller buyer pool than housing does in nearly every county in the country, which is exactly the kind of structural difference that makes borrowing a housing statistic and applying it to land, without adjustment, misleading rather than helpful.
What Does Listing Land With an Agent Actually Cost You?
Listing with an agent isn’t free even when the sale price looks higher, because commission and time both come out of what you actually net, and land can take considerably longer to sell than a house does in the same market.
Commission is the clearest cost to price in. According to RealTrends, the national average real estate commission rate reached 5.32 percent in 2022, the highest level since 2013. That figure is drawn from residential sales broadly; land commissions aren’t tracked the same way nationally, and they vary by agent and by how much diligence a specific parcel requires, but there’s no reason to assume land commission runs meaningfully lower. Ask any agent you’re comparing to quote it specifically for your parcel rather than assuming a residential number applies.
Time is the harder cost to price in, because it isn’t a single number, it’s whatever property taxes and any other holding costs accrue while the land sits unsold, and land can sit for a long time. The value at stake while it does varies enormously by category and location; as one reference point, according to the USDA National Agricultural Statistics Service, U.S. farm real estate value averaged $3,800 per acre in 2022, up 12.4 percent from 2021, though that figure covers farm real estate broadly and says nothing about what a specific recreational, timber, or residential lot is worth; price per acre on its own is a starting point for a conversation, not an appraisal. The honest version of this cost is: get a real estimate, for your parcel, of how long a sale is likely to take, and multiply that by what you’re paying in property tax and any other carrying costs during that window.
| What you’re comparing | Cash land buyer | Listing with an agent |
|---|---|---|
| How the number is set | Backed into from the buyer’s own resale math, discounted for marketability and time to resell | Set to estimated market value using comparable sales, then adjusted as the listing sits |
| Commission or fee to you | Typically none, stated as a company policy you should still confirm in writing | Commission, averaging 5.32% nationally for residential sales in 2022 per RealTrends; land rates vary by agent |
| Time to close | Days to a few weeks once terms are agreed | No fixed timeline; land can take substantially longer than a comparable house in the same market |
| Who typically covers closing costs | Often the buyer, but this is a company-by-company term, not an industry standard | Negotiated in the purchase agreement, often split or seller-paid |
| What you’re trading | Certainty and speed for a lower headline number | A shot at a higher headline number, in exchange for commission, marketing time, and holding costs |
How Do You Decide Which Path Nets You More on Your Land?
Which path actually leaves you with more money depends on three things specific to your parcel: how marketable it is to a retail buyer, how long you can afford to hold it, and how much certainty you need that the sale will actually close on the date you’re told.
Marketability is the biggest lever. A buildable residential lot near an established town, with legal access and utilities at the road, has a real pool of owner-occupant and builder buyers, which is exactly the kind of parcel where an agent’s marketing and a longer listing window are more likely to pay off, closer to the top end of what the Maximum Allowable Offer logic described above would predict for a house with a deep buyer pool. A landlocked parcel, one with a cloud on title, or raw acreage in a remote county has a much thinner buyer pool, the kind of situation where a listing can sit for a long time without an offer, and where a cash buyer’s speed and certainty carry more relative weight against a smaller price gap than the math above would suggest for an easier parcel.
Holding costs are the second lever, and they’re the most concrete number you can actually calculate. Pull your last property tax bill, estimate a realistic time on market from an agent (not the optimistic version), and multiply. If back taxes are already accumulating on the parcel, that math shifts further toward speed, since a company making cash offers can typically settle delinquent taxes out of closing costs at closing rather than requiring you to resolve them first.
Certainty is the third, and it’s the hardest to put a number on but often the deciding factor for sellers who are out of state, dealing with an estate, or simply done managing a parcel from a distance. An agreed price from a listing can still fall through on financing, inspection contingencies, or a buyer walking away during a long due diligence period; a cash offer, once the terms and closing date are set, generally doesn’t carry those same contingencies, though that’s a claim worth verifying with any specific buyer rather than assuming.
What Should You Verify Before You Compare Any Two Offers?
Compare net proceeds, not headline numbers, and get both sides of the comparison in writing before you decide, since a verbal listing estimate and a verbal cash offer are both easy to walk back once you’ve made your choice.
Ask the agent for a written estimate of likely sale price and likely time on market for your specific parcel, not a generic range pulled from a different property type. Ask the cash buyer for the offer in writing with a closing date, and confirm who’s paying closing costs and how any back taxes get handled, points covered in more depth in 9 Questions to Ask a Land Buying Company Before You Sign. If a cash offer seems unusually low relative to what you believe the land is worth, or the buyer won’t answer straightforward questions about how they arrived at the number, that pattern is worth weighing against the guidance in How to Spot a Shady Land Buyer before you sign anything.
This standard applies evenly, including to any company you’re evaluating alongside AMM Land Sales. AMM’s stated policy is to make cash offers with no commission or fee to the seller and to cover closing costs, but that description is only useful once it’s written into a purchase and sale agreement, the same requirement that applies to any other buyer’s stated terms. Whichever path you’re leaning toward, our comparisons guide walks through more of these tradeoffs, and you can request a cash offer to see a real number for your parcel before you commit to either route.