10 Misconceptions About Online Land Auctions
Lets Get Real About Online Land Auctions
First thing let me clarify that misconceptions about Online Farmland Auctions primarily only exist on the sellers’ part. There is good reason for this. The buying pool has long been exposed to online auctions. The vast majority of farm machinery sells by auction today. Most benefits for agricultural organizations are held online today. We’ve been doing online land auctions for over a decade so it’s not a new concept to the buyers. The issue really exists more for sellers because they are not often exposed to the daily culture of agriculture today.
When we have online land auctions which is fairly often, we rarely have any questions from buyers “how does this work” because they already understand how it works. Sellers considering selling a farm however just have not seen it often and are more likely to have misconceptions simply because they know the live form of selling auctions more and they want to draw similarities between the two.
So, an online land auction actually is very similar if not almost identical to a live in-person auction only with a few improvements that make it even more powerful. Here are some of the misconceptions I have heard from sellers in the past.
Misconceptions About Online Farmland Auctions
- Nobody will know about the auction if it’s held online! Actually, the advertising for an online land auction is 100% identical to a live auction. There are no differences in the advertising. In fact, online land auctions may have an advantage because the person can click a link in digital advertising and go right into the auction at the very moment they want to.
- Farmers won’t be able to figure out how to bid online! I want to keep my answers short so disregard my abrupt answers but the truth is, farmers are likely more technologically advanced than you are. Everything agriculture today is technology. Climb up in the cab of a modern combine or sprayer and look at the buttons. Farmers buy and sell machinery on online auctions all the time. They do reports online for multiple government agencies and do their banking online. Bidding on an online land auction is pretty easy for them.
- My uncle is a farmer and he doesn’t even use email so he couldn’t bid! Actually, not the case. We offer multiple ways for people to bid in an online land auction. Because it’s online doesn’t mean offline bids are not accepted. With each auction we almost have one bidder that prefers to bid by phone, absentee bid or with assistance from our staff. We often arrange a bidding location for those that prefer to be in person with us but the technology is still used. The auction is still held online.
- With everybody being anonymous somebody could screw up the auction! Not the case at all. Nobody is anonymous to us, we thoroughly vet each registered bidder, mostly without their knowledge. To this day after hundreds of land auctions we’ve only ever had to remove 1 bidder from an online land auction. We get to know each bidder very well and by the end of the bidding have visited with them at least 2-3 times and often in excess of 10 times each. Now certainly, bidders are anonymous to each other and that’s the benefit of an online land auction, with the social friction removed they are freer to bid their maximum possible price.
- When people are in-person they will bid more money! I don’t know any other way to say this other than that is simply not true. It is not even debatable. People bidding online will bid more simply because all barriers are removed. I have sold over 700 parcels of land. I have sold hundreds of live auctions and hundreds of online land auctions. My experience selling farmland with online only land auctions is undeniably more than any other person or auctioneer. I know the differences. I know what motivates bidders. On top of that I’ve had many discussions with peers in my industry that have read my books or blogs which have awakened them to the concept of social friction in live auctions. Industry wide this concept of social friction has been accepted by some of the most notable auctioneers in this industry. Plain and simple, people will bid more for your land in an online land auction. You’ll hear arguments from auctioneers that don’t offer online land auctions and certainly as a matter of self-preservation they will argue that, but it doesn’t change the fact that a land auction conducted on the DreamDirt platform will bring more money than a live auction will.
- Your land auctions are the same as anybody else’s, an auction is an auction! That is a fair misconception. We deal with services all of the time, each and every business is looking for some competitive advantage to draw business. The truth is however, an auction is not an auction. In fact, in the auction industry there is a wide swing in quality. Quality being volume of exposure and advertising, credentials of the auctioneers, auctioneer experience, auctioneer’s technology, the auctioneer’s audience and creditability, advertising quality and the auctioneers methods. In this industry we are not regulated by any government agency. Anybody can be an auctioneer: anybody can offer to sell your land at auction. When you start to choose auction companies, realize that an auction is not just an auction. At DreamDirt we specialize only in farmland auctions. We are not farm managers first. Our auctioneers have top industry designations. We are not new at online land auctions, we started them! We have real estate licenses, we carry insurance, we create all advertising in house and don’t use 3rd party vendors and most of all our software is proprietary, we developed it specifically for land auctions. There is NO other comparable software or company that uses our software. Any other company offering land auctions is typically using a portal type 3rd party software that seller’s pots and pans or land auctions. Trusting your farm sale to a company with minimal experience and using 3rd party tools will cost you in result and outcome. Realize, most of those other companies are trying to learn from us, we started online land auctions over a decade ago. Our trusted professionals at DreamDirt have the experience, resources and technology to do the best job for you.
- I heard that online land auctions have negative consequences! My first question is “who did you hear it from” and I bet the answer is “An auctioneer that doesn’t offer online land auctions” and that is the full truth. Online land auctions produce a better result in price and cost less. The seller nets significantly more money using an online land auction. It’s hard to see any negative consequence. The truth is, it is a much more positive situation even for somebody that pays more than they would have because in the end you likely have a different high bidder in an online auction. They feel good about it because they were able to win without the social friction, without the same worry and concerns. As I always say “Seller happy, buyer happy, the auctioneers are happy”.
- We were told listing the farm first is a better choice and then if we can’t get out price we go to auction! Well, honestly, that is exactly opposite of reality. We offer both listings and auctions so I’m impartial. First, listings cost nearly twice as much in commission so let that be a guide when you are told that. But here is the truth, auctions through competition consistently create a higher price outcome than listings. Moving from auction to listing is a much safer avenue for the seller than vice versa. You will never find there is an upside for your farm, meaning if it can bring that jaw dropping price or sell above everybody’s perceived value by using a listing first. If you use a listing and that upside was possible the farm will either sell quickly for less than an auction would have produced, or it will lag on the market and hurt the price potential at auction because nobody can figure out why it’s not selling. It’s a case of “nobody wants to blink first”.
- At an auction you can talk to people but online you can’t even say anything to them! False again. When somebody is bidding on a land auction, we are in constant communications with them by phone, email and text message. Our system is built for this and communications and engagement are primary considerations when we built the system. We do talk to them; we do encourage them and since it is in private we are able to more effectively do so and help them with their buying decision than if it was in a public setting in front of everybody. Just because its online doesn’t mean we don’t talk to anybody. Just the bids are taking online, remember above I said all other things are the same.
- Bidders want somewhere to come to and see other people! Frankly, no they don’t. We know this because we’ve talk to so many bidders in online land auctions and they very much value their privacy. They love bidding online. They love how well our system and software works. They also value their time and not having to drive somewhere to sit in front of everybody and sweat the social details is very valuable to the bidders. So many of them have thanked us for creating the system we have. They make it clear they appreciate that somebody is looking out for their privacy. On top of that, if it was a listing, they would enjoy the same level of privacy. Your auction isn’t something everybody needs to know every detail about. They just need to know enough to bid and we provide that.
If You Are Selling Land You Should Know
Online land auctions are a very powerful way to sell land. Our team has pioneered the method and over the years developed the absolute best software for selling farmland in online auctions. We’ve developed a product and service that is very economically priced and our sellers and buyers are able to have a positive experience with each farmland transaction. If you are considering selling a farm, we’d love to offer you a free consultation and dig deeper into the details of creating a campaign and positive outcome for you and your family.
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.
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