What Steps to Take When Selling Iowa Farmland
Jason J Smith
Auctioneer & Land Broker
Jason is an experienced farmland broker and auctioneer with extensive experience in farmland sales across this Midwest. Jason has worked with hundreds of clients to create advantageous outcomes. If you are selling land schedule a consultation with Jason by calling or using the calendar.
You Are In the Right Place
Your family blessed you with a farmland inheritance and you don’t know which way to turn. It all seems so confusing. That’s the most common predicament of most clients that engage us. They are scared of making the wrong decisions and they want step by step guidance. At DreamDirt, we try to make the process of selling farmland as easy and worry free as possible. We’ve built several elements into our process to ensure you are well informed. You will get attentive communication and expert level guidance when selling your Iowa Farmland.
STEP 1: Learn and Ask Questions About Selling Your Farmland:
This is probably where you are at in your process. You want to cover your bases. You need information to make good decisions. You want to feel like you are safe. At DreamDirt, we offer many resources for you to learn about selling farmland in Iowa. We’ve been entrusted to sell thousands of parcels of land in our history. We offer our Free Ebooks about selling Iowa Farmland. Our Farmland Sales Blog has a wealth of information. Look at our Frequently Asked Questions about selling Iowa Farmland. Our farmland marketing consultations can be delivered in many ways. We can meet in person at your home or our office. Often our clients live a long ways away and a phone conference does the job. Zoom Meetings online have worked well too.
We will do whatever is comfortable for you. This consultation often requires answering some questions we have so we can get a clear picture of your objectives. During this meeting, we work to identify the best path forward for you. Once we understand the marketing methods that will best serve you, we can show you the options you have to sell your farmland in Iowa.
Step 2: Determine Your Farmland’s Fair Market Value
The process of appraising farmland is likely to be an important part of your decision making, so accuracy is important. As Auctioneers and Land Brokers we know this may be the most influential part of your decision making. We also see that others promise to be 100% accurate, there simply is no such thing. In fact, it’s almost impossible to tell somebody what a farm will sell for on any given day. That said, we do have the most comprehensive set of farmland sales data available along with many years of trusted and proven experience. If you consider that with an auction for example, when we initially talk, we will be discussing the value of your farm likely 60 days before it sells.
How We Value Farmland
Farmland is a commodity, its value is a moving target. When commodity prices rise and fall so do land values. As interest rates and input costs or foreign policy change, so do land prices. For this reason, we are always completely up front with our clients so they are not surprised later on. Facing the potential of having to eventually accept a lower price would be a bad experience for anybody. It’s impossible to tell you exactly what your farm will sell for, but we can estimate a minimum value for every farm. This is a estimate of the absolute lowest offer you can expect to receive. You have the power to decide what amount you will accept. We always desire to be as conservative as possible when estimating the value of our clients farms.
Clients Appreciate Our Appraisal Approach
Our clients have always appreciated this approach because they understand that they are most likely to achieve a higher price on their eventual sale, but they knew the point they would not be below. Many times as we discuss a sale with a potential client who has received multiple market analysis reports they will often say our analysis is the lowest. You can easily see we will be honest with you and never try to impress with you with a price we’ll later have to apologize for. Unfortunately, others may promise you a higher price only to later try to move your expectations lower after they gained your business.
Step 3: Get a Detailed Market Analysis
A Market Analysis is a custom report about your farmland, not just the value of your Iowa Farmland. In fact, at DreamDirt we were the originators of the Farmland Market Analysis Report! In 2008 we first placed the “Whats My Farmland Worth” message on our website and offered potential sellers a free report and inventory of their farmland. Eventually this method spread across our entire industry!
At DreamDirt Auctions, our Market Analysis is a thorough and accurate accounting of the inventory of your farm. This analysis considers the soils, local land demand, sales volumes in your area, aerial maps, comparable farmland sales, access and drainage assessment. We also consider income potential and investment analysis and other important considerations that you’ll need to know before making any decisions.
Step 4: Get a Farmland Marketing Proposal
Typically delivered with your market analysis, DreamDirt prepares a custom marketing proposal for you. This is a proposal that should you desire to engage our firm for farm real estate or auctioneer services will serve as an outline of what our agreement will be. It will identify all deliverable services and products on our part. It will also show your responsibilities as a seller and any real estate fees associated with selling your Iowa land. It also offers a timeline to know what will happen and when it will happen.
You Make the Decisions
The farmland marketing proposal puts you in the drivers seat to make important decisions about your land sale. It allows you to make choices that fit you. Do you want to sell by listing or auction? What commission do you want to pay? How much advertising do you desire? Can you have additional marketing done? Our proposals are meant to engage a client and are very flexible so you get full control over the process. We are always negotiable so you end up in a position you are most comfortable going forward. Our clients tell us they feel like they are getting the right value for the fees they pay us.
Your Ebooks were an incredible help in understanding the selling process and just grasping the terminology associated with our farmland sale. I just had no idea of the magnitude the many considerations we’d make but the books did a great job of helping us make better decisions. I was so pleasantly surprised to find them that I read both of them start to finish in a day. I hope others find them as helpful as we did!
Step 5: Establishing a Land Listing Price or Auction Reserve
Once you have made it through the Marketing Proposal stage with DreamDirt and have made a decision to engage us for our farm real estate services you have made a lot of decisions. The final decision you must make is “what is the price of the farm”. Depending on how we are selling the farm for you will determine when you need to set a price. If you intend to sell the farm by private sale the price will be important immediately.
Auction Marketing Method
If you have chosen an auction as a marketing method for your farm then the reserve is not immediately important. In fact, while you can set a reserve early in the process and have it included in your listing agreement, we more often sell farms subject to the sellers confirmation. This is a reserved auction method where the seller waits until the final bid to determine if they will accept the price or not. In fact, this seems to be the most popular method with our clients. Those who have sold with us tell us they appreciated not being stressed by having to set a reserve. It is much less stressful to see the auction play out before deciding if they will accept the price.
Land Seller Satisfaction
We guarantee our results! That’s why we offer a Risk Free sellers experience. On our tillable farmland auctions, 100% of sellers have accepted the final bid! We have never had a seller not accept the final bid on a tillable farmland auction! That is an impressive statistic and testament to the power of our farm real estate team’s ability to achieve the best possible price for every farm we sell. It is important to know, you are under NO OBLIGATION to accept the high bid on your auction when you sell with DreamDirt.
Step 6 Marketing Your Farmland Aggressively:
We are happy you have decided to share this journey with us and we will honor your trust with thorough representation and communication to ensure you are delighted by each and every step we take. This is where we shine, it’s our passion to guide people through this process safely. DreamDirt has long been known for its aggressive marketing campaigns. We offer unique and original thought that leads to the most effective marketing and eventual sales outcome. Selling land is something you only get one shot at and the last thing you want to do is wake up the day after the sale and say “I sure wish I’d have….”
How Do We Advertise Farmland For Sale?
Many of our clients ask “how do you advertise the farm?”. Our answer is always, “there isn’t anything we don’t do”. We start with professional videography and photography of the farm plus thorough research to build the advertising that ranges from videos, print and online graphics to post card and sale bill designs. Our drone videos are the standard in the industry! In 2016 we won #1 Real Estate Advertising Video in the National Auctioneers contest. The following year, our video format became the standard in use by hundreds of land auction companies today! We use every major avenue of advertising you’d expect from our website, newspapers, emails blasts, sale bills, multiple listing services, signs on the property, social media, radio interviews and fliers.
We don’t skip any potential exposure and we do many things people might not always expect. Some of these include search engine ads, phone campaigns, text messaging, aggregation websites, direct mail campaigns, targeted social media campaigns, billboards and even agricultural influencers that help spread the message about our listings! If you want to know more we’d love to visit about our advertising program, we promise its the most thorough you can get.
Step 7 Land Negotiations:
Negotiations is a scary word to some, but we are professionals. Negotiating is what we do for a living so we’ll make it less stressful or you. Best of all, we’ll be able to guide you through the process of decision making. When you have a professional on your side you understand what can and can’t be done. Knowing if the information coming from the other side is viable or not in your best interest is valuable.
Farmland Private Sales
Negotiations apply to much more than just price. All terms of a farmland sale are negotiable. With a listing you’ll negotiate with 1-3 buyers at a time depending on the appeal of your farm. While most brokers employ a drip marketing campaign with listings we take a more aggressive approach at launch in an attempt to generate multiple buyers immediately. This allows you to negotiate through us and have options.
As an auction seller, your negotiations are much different than if you use a private listing. With an auction there is much less to negotiate because as a seller you set all of the terms of the sale prior to launching the auction. The only negotiable aspect of an auction is the price which will move up incrementally through out the process. The auction process is most powerful because of this. With a listing you are constantly starting over at zero with new buyers, but with an auction the price improves with each bidder and continues to go up. Auction earnest deposits are also non-refundable and offer sellers a little extra security in keeping the deal on track!
Step 8 Accepted Offer and Real Estate Closing Process:
Congratulations when you get to this point! You’ve made lots of decisions, you’ve spent a lot of time talking with us. You’ve likely felt a few emotions along the way but here you are, headed for the closing table. Whether you sold using a listing or an auction, once you’ve made it to this point we will be preparing the appropriate purchase agreement for your transaction. This document becomes the guiding contract between the buyer and seller.
Real Estate Purchase Agreement for Farmland
Once all parties have signed you will get a copy of this legally binding document. It will which will guide us through the land transaction but don’t worry, we will be there every step of the way. We help by coordinating all of the abstracting, title opinions, real estate documents, settlement statements, disclosures and eventually the deed packet that transfers the farm. Each closing process is different and unique and there can be various considerations. Some include 1031 exchanges that might be occurring, bank financing, seller financing and transfers of money.
At DreamDirt we employ a transaction manager for our clients. Stephanie Lee came to work with us after many years of experience in the banking and mortgage industry! Stephanie has handled some of the most complex closings and can provide you with an update anytime you need to know anything.
I’m Here to Help You Sell Farmland
If you read my guide to selling farmland in Iowa to this point, thank you for your time. I hope it was helpful but I want you to know that at any moment you can pick up the phone and call me at 515-537-6633 or our main office 641-423-6400 and talk to a real professional in the field. I know not all situations are the same and each will have its unique characteristics so I’m always happy to visit with you about your situation and offer solutions that will help you transition to the next phase much more easily.
Be sure to check out our Frequently Asked Questions about selling farmland by auction.
Request a Free Valuation for Your Farm or Land Property
Whether you’re ready to start the selling process, or even remotely curious, we will gladly provide you with a FREE Market Analysis! If you are in a position to sell land in the Midwest, we want to help you achieve the top of the market on your sale.
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