Selling via Auctions
So, you are now ready to sell your farmland. With today’s land prices so strong, that should be easy enough. Your next thought might be, I’ll just go over and see the neighbor. Yes, you could do that, but what should the price be? How will you be certain that you will receive all of the dollars you deserve from the sale? After all, you only have the opportunity to sell the farm one time. Obtaining the maximum price the market will bear can be elusive. Can you really be sure that you have tested today’s true market for your farm if you handle the sale yourself?
Sales statistics say no. Terra Firma, the newsletter of the REALTORSŪ Land Institute, recently had an article from an Iowa farmland appraiser where he noted that he had recently studied land records that were exposed to the open market by a professional land broker or auctioneer and those sales were $1,000.00 - $1,500.00 per acre above the sales made individual to individual. Other appraisers have confirmed similar results. We have recently reviewed several farm land sales in Minnesota and found that the dollar differential sellers received by engaging a land sales professional were even greater than the Iowa study indicated.
Market knowledge is a critical factor in selling farmland today and it is an ever moving target. Volatile commodity prices, global demand and local land demand dynamics along with numerous other factors make land pricing predictions within any precise range a real challenge. The land marketing professionals, the true land professionals will spend many hours every week studying land trends, and why one tract is more desirable in the marketplace than another, even in a given neighborhood.
1. The first reason would obviously be the fact that their knowledge of the land market and the psychology of marketing isn’t present.
Marketing farmland to achieve top dollar is a great deal more than running a few ads in the local newspaper. Marketing professionals devote their lives to honing their skills and employing the most effective techniques. They strive to reach the maximum number of qualified potential buyers, both farmers and investors to provide genuine competitive bidding for each farm sale.
That ag land professional will invest days doing their own due diligence on each property the represent. They know that if they can remove uncertainties and accentuate the positives about the property, the buyer will have confidence to pay more for the property. If we contrast that with the lack of information available to a buyer for the sale by owner and or local attorney, then we see another reason why the ag land broker/auctioneer obtains better prices for their clients.