DreamDirt’s 5 Tips for Selling Farmland

Insider Tips to Help You Sell Land

Land sellers have a lot to consider when making their decision. We’ve compiled 5 main tips to help you get started on the right foot to a successful sale!

We see too many situations where a seller put themselves at a disadvantage prior to calling us by talking to people about the sale of the farm, such as a tenant. There are ways to ensure your tenant is treated fairly in an auction and you achieve full price. You do not have an obligation to offer it to the tenant first. Even though it may not seem like a big deal, sometimes the seller gives away valuable or inaccurate information. I’ve seen many different scenarios ranging from a buyer trapping the seller at a price lower than market value, to a drug out process costing the seller time and money.

We want you to achieve the full market value of your farm no matter how you sell it. You, or your family, worked hard for many years and should now get what your work deserves. I can almost guarantee that selling the farm at a discount was never in the plans. Always talk to a sales professional first to at least get advice on how to move forward.

Tip 4: Understand Tenancy Laws

If tenancy is not available on the farm in the first year of ownership for the new buyer it is important to ensure that you create an equitable split of income for that crop year. July 1 is the middle of the year and the middle of the crop year. I always consider that the 50% point for income and March 1 the 100% point. If your closing is on March 1, give the new buyer 100% of the rental income and at least 50% of CRP income. If your closing is after July 1, you’ll be looking at splitting 50% or less rental income to the buyer and 25% or so of CRP income. Making the sale with tenant equitable is the best way to ensure the best bid. We can help guide you through creating an equitable agreement for this.

Tip 5: Set the Terms and Conditions of Your Auction

The terms and conditions of an auction are the basis of an agreement between the buyer and seller. For example, you will set how the bidding happens, when the closing date is, buyer’s premium and how much earnest deposit is due. A good set of terms and conditions strengthens your transaction and is one of your most important considerations; but, that is not enough. If your terms and conditions don’t match your advertising and purchase agreement, then you have a legal issue that could be costly. It is important that terms and conditions are set and every piece of advertising and writing includes them in their original form.

The Most Valuable Mechanism For You

There is a reason so many farm sellers have relied on DreamDirt to sell their farms. We understand Midwestern farmland prices and can spot value quickly. The proper evaluation of your assets by an appraiser is the first step and often the foundation of your decision-making when selling farm land real estate. We have developed the tools leveraging the right data on Midwest farmland prices and machinery sales to produce accurate results. Thus, we are able to pinpoint selling prices so our sellers walk away with peace of mind.

We would be happy to provide you with a FREE MARKET ANALYSIS CONSULTATION to help you understand the value of your farm! Whether you’re ready to start the selling process, or even remotely curious, we will gladly provide this to you!

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