Farmland Auctions vs. Real Estate Listing
It’s time to sell your farmland. You’ve got two choices. You can auction or list it. As farmland specialists, we come up with three points that may help you decide.
Like anything with life, the timing seems to be everything, especially farmland sales. Auctions provide motivation since others are placing bids in the same moment. In an auction, the seller decides the sale and close date. This typically is helpful for a trust or estate that’s on a timeline to liquidate. When farmland is listed, buyers may float offers and never reveal their intention because they don’t feel obligated to push the offer.
On the other hand, farmland listings give flexibility for buyers to buy a property but need a formable schedule. This can be especially true for 1031 exchanges. Well-qualified buyers will forgo auctions because it doesn’t meet their method of buying farmland.
Farmland real estate owners can often be split multiple ways across the land and can raise its own set of unique ownership structures and challenges. Oftentimes, a farmland auction can help work through some of the ownership challenges. If you have multiple parcels that need to be sold, you can still sell them through an auction. Read more about that here.
WIth many decision makers, the listing process can become ineffective and inefficient. When terms and price are in negotiations, like with most listings, approvals of multiple owners can be few and far between. By taking your farmland to auction, owners can define all of the terms prior to the sale and owners can let the market determine the sale price. “If you want to know what someone is willing to give… take it to auction. If you want to know the price of your farmland, list it and wait for an offer near that price” David Whitaker, head of Whitaker Marketing Group adds. Taking your farmland to auction can be very constructive in really coming to terms of what the farmland value is.
A key indicator of how to sell the farm is the local market. Location, location, location. One of the most important factors in farmland values. Multiple buyers who are willing to compete for your farmland that’s located in a prime area will bid the price up and likely get the best result. A fruitful auction takes many excited bidders.
Ultimately, the seller needs to decide what their end goal is for selling their land. If you’re ready to list or auction your farmland, give David a call for a free farmland valuation.