Frequently Asked Questions
Common Questions about Buying and Selling with DreamDirt
In the auction industry, the word ‘professional’ carries no official definition. Anybody can say they are a ‘professional’ auctioneer. When choosing an auctioneer to carry out your land auction, do your research and check the credibility of any prospectives. When DreamDirt calls our auctioneers ‘professionals’ we have years of experience backing up that claim. All of our auctioneers have graduated from the World Wide College of Auctioneering and hold the CAI designation only one percent of ‘professional’ auctioneers can say to have. We require all our auctioneers to also hold their real estate license, and surround our auctioneers with an in-house team of experts who can build, advertise, conduct, insure, and close an auction without having to rely on outside parties.
An online auction is not affected by weather conditions.
If internet options aren’t possible, DreamDirt will help these potential bidders connect to the auction via telephone or an alternate live bidding location.
While we have never experienced a catastrophic technology failure during an auction, we have created a system to handle the potential for these events. We’ve created redundancy and mirror sites that seamlessly take over if one technology fails.
At a typical land auction, bidders are not required to identify themselves. In our online auctions, registration of bidders is private and required. DreamDirt utilizes a four-step registration process with identity verification. One step is providing a credit card that matches the bidder profile information. Another step involves a phone interview where bidders answer questions to cross-check their information and financial capabilities.
This rarely occurs due to the fact that land is an extremely valuable resource in today’s world. If it does happen, the auction can close and the sale can move forward privately as a listing.
In a reserve auction, the seller sets an undisclosed price the farm must reach before it can sell. In absolute auctions, the seller guarantees that the land will sell to the highest bidder regardless of the price.
The primary differences between the two types of auctions (apart from one being online) are that online auctions can:
- Directly connect bidders to the actual land auction to bid through advertising hyperlinks
- Reduce social pressures and bidder friction, ultimately freeing bidders to reach higher prices
- Lower the cost to sellers while increasing a sale’s efficiency
- Create speed and urgency due to buying against a clock
In 2017, approximately 55% of farmland in Iowa was sold via auction and only 17% was sold by listing. The reason for this is that land auctions create an ideal outcome in terms and conditions and price. Auctions bring more money by nature due to the fact that your bidders compete with HIGHER prices, whereas in real estate sales sellers are forced to continually return to negotiating a lower price. In addition, auctions create competitive bidding, are rid of contingencies, feature as-is selling conditions, simple negotiations, among other things.
It is never easy to go through the process of selling the family farm or estate. Sibling rivalry, economic disparity between heirs, and many other factors can play a hand in making things difficult. Though it can seem silly, it has helped a lot of families to abide by the following ground rules:
- Everybody must take turns talking. Alternating between birth order and reverse birth order is a fair way to allow comments.
- Only discuss items on the agenda during each discussion. Nobody is allowed to refer to some previous wrong-doing or action.
- No profanity or personal insults. Violating this rule will have predetermined consequences.
- References to others’ finances are not allowed.
- No assigning blame to anybody for anything.
Auctions are the overall best way to sell properties where demand is average or higher because all buyers then have reasonably equal leverage. The following situations may do better with a private listing:
- When competition will be difficult to create between buying demographics
- When a certain bidder has exceptional leverage
- If the property has a problem that is not easily correctable
- The property is low-quality with little demand
We’re here to help you determine the best course of action for your unique property.
Saying no to the highest bid during an auction should be considered carefully and with caution. As a seller, when you say no to the high bid during an auction, auction law dictates that all bids become void and bidding moves back to $0. Some believe this ‘buys time’ and they are allowed to go back and accept the bid. This is untrue. If a farm auction was properly marketed and conducted, then the highest market value was likely already achieved by the highest bid.
You have multiple options as a seller on auction day:
- Join our team in person and monitor the auction
- Join our team via telephone or video conference
- Watch the auction from an online bidder’s point of view and wait for a phone call from our team
- Give DreamDirt instructions and not join in the auction
We’re here to make your life easy, and ensure you the best experience.
The entire process, from the day you sign a listing agreement to sell, to the closing process after the auction, lasts around 65-80 days. There are two phases. Marketing lasts roughly 30 days at the end of which is the auction, and closing takes somewhere between 30 and 40 days.
DreamDirt utilizes traditional advertising mediums such as newspapers, signs, sale bills, and direct mail along with modern digital advertising and cutting-edge drone footage to guarantee a high-level of exposure for your land auction. All advertising is done in-house, unlike other auction companies who have to work with 3rd-party vendors. Your auction advertising is personally curated, tracked, and tended to by our marketing professionals.
The first step to selling something as large-scale and valuable as your farm is to talk to a professional. Your DreamDirt representative can get you started by answering any crucial questions you may have and guide you in the right direction. We expect no commitment and promise to answer any of your questions without obligation.
No. Auctions always sell property for its true market value. Auctions are the premiere sale method for rare and valuable items. With today’s increasing population and decreasing amount of arable land, what is more valuable than a high-quality tract of Iowa farmland? Auctions consistently bring land its true market value over public listings and private sales. Feel free to browse our Sold Properties.
Auctions get a bad rap for being the ‘desperate’ method of selling, although this is far from the truth. Statistics prove that farmland auction prices are better than private sale prices. Auctions are the best first choice to sell the farm, and in fact, listing the property first only to resort to an auction looks desperate and can ultimately sabotage the end results.
When creating an auction, you can boil down the process to five steps: setting a sellers objective, defining what a positive outcome looks like, identifying the core and secondary markets, advertising and marketing the property, and executing the sale. The best way to go about having an auction is to contact one of our professional and certified auctioneers to walk you through the process.
While many sellers that inherit farms falsely believe they cannot sell a tenant-occupied farm, the truth is that you can! The only change for the tenant is that they would get a new landlord – the buyer of the farm. In the case that sellers wish to sell the farm with no tenancy, most states have farm tenancy laws that dictate the amount of notice one must give the tenant before eliminating their tenancy. DreamDirt can help distribute the proper notice to tenants, and put you in the best position to sell the farm.
The answer can vary slightly depending on each scenario, but in general there is not a bad time of year to sell! Certain considerations such as type of land may sell better at certain times (hunting land sells better in-season) and the time of year may affect your terms and conditions of the sale, but your DreamDirt representative works with you to create demand and drive your sale forward regardless of the season.
Yes. A reserve/minimum is a protection point and not an asking price. A reserve price should be set at lower than what you think the land is going to sell for, but high enough that you are protected from a financial disaster. After years and years of conducting auctions, studying the data, and experiencing the results, DreamDirt auctioneers have developed a science to setting a reserve price. When lifted at a crucial moment during the auction, this signals commitment to your buyers and drives even further bidder competition.
Online bidders have multiple ways of communicating with an auction manager. This includes chat functions, text messaging capabilities, browser notifications, and a telephone dialer. An auctioneer can broadcast messages to all bidders or directly to a specific bidder at any point in the auction.
Cash bids require that buyers bid as if they are spending cash, but in most cases, the buyer will require financing. If a buyer requires financing they must follow through on their bid amount no matter what. This ensures that the seller receives the highest bid regardless of the buyer’s circumstance.
A family can agree upon any conditions for the auction of the land. However, most family members are treated as a typical bidder and can purchase the farmland through auction.