Why Do Auction Transactions Close More Often Than Listings?

Mar 24, 2015 | Land Auctions, Land Auctions vs. Listings, Land Seller Resources

Jason Smith

Jason Smith

Auctioneer, Land Broker, Founder

Jason is an Auctioneer and Land Broker in Iowa and the surrounding states.  The DreamDirt team of auctioneers, land brokers, and realtors specialize in farmland sales primarily serving the heirs to family farms all across Iowa and some surrounding states.  Today's report details the current land market in Iowa for land being sold at auctions.

Email: Jason@dreamdirt.com | Phone: (515) 537-6633

The Difference Between Land Auctions and Land Listings

In proposing our services to farmland sellers I often quote the fact that real estate sold at auction has a 99% closing rate while farmland real estate sold by listing has a much lower closing rate at 71%.

There is one reason that may not be easy to see but once you understand the differences in the methods of marketing you quickly realize why there is a such a gap between the two.  With an auction the buyers “due diligence” is prior to the sale while with a listing the buyers due diligence happens after the offer is made.

The fact that auction buyers bid with no contingency and pay a non-refundable cash earnest deposit reduces failed closings greatly.  With listings earnest deposits are almost always refundable and buyers will not begin to do most due diligence until after an offer is made.  Often with listings new information comes to light after the offer is made forcing the buyer to withdraw and refund of earnest deposit.

While many feel an auction puts them outside their comfort zone its actually a much more seller friendly method and produces prices above that of listings in most cases.  I always ask the question “Have you ever heard of a record price being set by private sale”  Its almost always auctions that are setting record prices as well as a much more dependable closing rate.

Auctions are not always a match for the resources but we do believe they are a superior marketing method in most cases.  If you are interested in selling farmland real estate let us help you evaluate the marketing methods that are right for your farm.  Give us a call to learn more and get a free no obligation proposal for marketing services.

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Farmland For Sale Adair County, Iowa

Farmland For Sale Adair County, Iowa

Farmland For Sale Adair County, IowaSellers: Gary Meyer, Judith Meyer, and Diane Darling  Auctioneers: Jason Smith 515-537-6633 and Rachel Tiffany 515-954-8063  Location: Bridgewater, Iowa Land Auction Details in Adair CountyThis farm is located on Highway 92 and has...

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