8 Reasons To Sell Iowa Farm Real Estate At Auction
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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The majority Iowa farm real estate sold is sold by the auction method and for 8 good reasons income producing farms achieve the best results when sold at auction. Not all farms are well suited for the auction method but the majority are.
Auctions Create Competition For Iowa Farm Real Estate
The potential sale of a farm by auction creates completion among buyers by creating a sense of urgency, a fear of loss and excitement in buyers. Competition for Iowa farm real estate always drives final results and the more participation you have in your auction, the higher the price you will achieve. With a listing there is very little competition and some buyers will always try to wait the seller out hoping they can not attract a suitable buyer which will end in frustration and potentially a lower selling price. Creating competition makes your asset more scarce. When there is only 1 farm and multiple buyers you can understand what we mean by competition but as a listing farms typically attract only one buyer at a time. Our auctions include online bidding which has shown time and time again to bring additional competition and bidders that otherwise would not have participated in your auction.
Auction Sales Are Date Specific
Tenancy laws set the dates of notices and dates of possession of farms and this lends itself to an auction. Being able to pin point the exact date the farm will sell and close means you absolutely know you will meet any potential deadlines and can better plan for the sale. For tax purposes it allows you to time the sale to the year you wish to sell in. With a listing you have no idea what day it will sell or close.
More Buyers Are Attracted To Auctions
Auctions offer buyers the opportunity to crowd appraise an asset and it ensures them they are not overpaying for an asset. There are examples of farms that were listed at one price that never sold until they were taken to auction and once they made it to auction actually sold for more than the listing price. The competition brings multiple buyers at once and allows buyers the sense of fairness and the piece of mind that others felt the farm was worth the bid just before theirs.
Equal Opportunity For Buyers
To see the world from a land buyers eyes you would see that each of them wants to buy your farm, but it will be most valuable to 1 of them. When you utilize an auction to sell Iowa farm real estate each of them gets the same exact opportunity under the exact same terms to buy your farm. Because of the aggressive saturation marketing we use to sell farms they all get notice it will sell, it would be hard for them to not be exposed to it. People don’t often understand that farms do not sell very often and your particular farm might be the one that 1 or 2 people have always driven by and thought “I sure would like to own that farm” for one reason or another. Your farm fits their operation or target acquisition perfectly and using an auction makes them compete for it. By using a listing method some people will eventually learn of the sale after its been completed and be upset they did not get an opportunity to buy the farm because drip advertising did not reach them.
Your Advertising Is Maximized
When you list your farm your farm is not heavily advertised by most brokerages. They are typically included in a drip campaign that includes many other properties. With an auction all of the advertising is about your farm and for a 30 day period its exposed in everyday imaginable using every means we have at our disposal. Having that spotlight gets your farm a great deal more attention.
Days On Market Are Reduced
If you have ever sold a home you may have experienced “Days on Market” and if not you have seen it before where a home is listed for 6-12 months sometimes even years before it finally sells. Because auctions are date specific you can sell more quickly and reduce your holding costs and meet deadlines that could include financial penalties. Property taxes, insurance and maintenance costs are eliminate more quickly when you sell at auction actually saving you money.
Unconditional Contingency Free Offers
With a listing you are putting your farm up for sale and will receive offers from buyers where as when you sell using an auction you will set all the terms and conditions of the farmland auction and offer the property to all the buyers under 1 set of rules. You get to choose every detail of how the farm sells and every buyer will bid on it based on those rules and it will be contingency free. Often times with private sales buyers will offer to pay a certain price but only if you do this, do that and do this. Those contingencies are often self serving for the buyer and give them the leverage in the transaction while you jump through the hoops hoping to meet their demands.
Nobody wants to pay more commission than they have to and with an auction we represent you the seller only and there is no buyers agent to pay because the buyer will be representing themselves and if they are represented by an agent they will be required to pay their agent. If you list your farm for sale most brokers cooperate with other brokers so in other words you might list the farm with one broker but another broker brings the buyer leaving 2 agents that will split the commission on your farm which often ends up in a higher commission rate. With an auction we charge you less commission for this reason.
We offer private real estate brokerage services and auction services both. Auctions are not right for every farm and often lower quality farms with little income can be better candidates for a private sale by listing. If you are considering sell farm real estate in Iowa I would be glad to help you evaluate your farm and give you good advice on the best marketing method to sell your farm for the most money.
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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...