DreamDirt’s 5 Tips for Selling Farmland
Thinking of Selling Your Farmland?
Making the decision to sell farmland is never easy, let alone the navigating the various options and information available in this day and age. At DreamDirt, it has been our goal to be the farm real estate company that eases the burden of selling and buying land. We have worked hard over the last decade to study and understand the buyer’s journey. From this, we have taken what we have learned and turned it into a process that benefits the seller’s outcome and eases the burden for buyers.
We are not farm managers, nor do we represent buyers of land for large agricultural investment firms. Many companies that provide auction services are primarily farm management companies, having long- term relationships with the buyers they manage land for. Due to the nature of the farm management industry, these companies are incentivized to only pursue buyers they manage farms for. As an auction company, and only an auction company, DreamDirt’s allegiance is solely to our sellers. Our sole job is to deliver the success you hope to achieve with your sale. With that responsibility, we aggressively pursue every potential bidder and encourage diverse participation in your sale. We have no motivations outside of our sellers’ best interests.
We’ve also worked hard to be the absolute best auctioneers possible. Our auction staff is the most highly trained and qualified team available in the Midwest. Our Certified Auctioneer Institute (CAI) auctioneers are among the top 1% of auctioneers in the nation. To further that, our auction staff are also Professional Ringman Institute (PRI) designation holders, and our marketing team holds degrees from Iowa State University and personally develop all advertising and outreach. This combination of in-house qualification is not available at any other auction company.
One of our main goals as an auction company is to ease and ultimately remove the friction from the process of selling and buying. I think our team is miles ahead in bringing an auction process to market that is valuable to both the buyer and seller. Auction after auction, buyers and sellers walk away thanking us for making it easy.
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!
Tip 1: Use a Knowledgeable Auctioneer
Many clients are surprised to learn auctioneering is largely unregulated as a profession. Auctions might seem like a very simple thing because most people just focus on the fast talking, or chanting, part. Now, I’m sure you may be wondering why any of it matters? As professionals that are licensed to sell real estate as brokers, we can conduct an auction for real estate without any of the restrictions due to our training and background.
At DreamDirt, we understand real estate law and the principles of the industry. We can spot potential dangers an unlicensed auctioneer would not be aware of. Our auctioneers create a smoother transaction and shield our clients from liability. It is extremely important to investigate qualifications, experience, past results and education to help you make the best choice.
Tip 2: Try to Engage Your Chosen Auction Professional as Early as Possible
“When is the best time to sell?” is a frequently asked question of many sellers, often resulting in a sale during the offseason, or winter. The earlier this conversation can be had, the more advantage and good advice available to you. Timing the auction against other auctions in the area or just collecting better quality imagery for advertising efforts are among those advantages.
Tip 3: Do Not Talk to Others About the Auction Before You Get Advice From an Auction Professional
When the time comes to sell your farm, the first call you should make is to a sales professional. No decision has to be made at the time of a call, but a true professional can answer your questions and get you pointed in the right direction.
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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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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