The booming agricultural market of two years ago made selling large tracts of land much easier than it is today. There are several options available to property owners ranging from selling the land directly, to putting it up for auction.
“Listing and auction work the opposite. When a seller lists a property they start with the highest asking price and go down. At an auction the price will start low and work up, explained Zachary Kelly of Kelly Real Estate and Auction Co. in Mountain Grove, Mo. Regardless of the method of selling there are several considerations that will maximize profits from any parcel of land.
1. Clean up the property.
According to Kelly, the No. 1 difficulty in selling property is that potential buyers do not like to consider property that they will have to put a lot of work into. “Most buyers consider it to be two to three times more expensive to clean up a property than it would cost the owner,” he said. Cleaning up the property should also help the buyer on the appraisal. If the property is unkempt and cluttered with junk the perceived value of the property decreases.
Sam Crawford of Crawford Auction Service in Cross Timbers, Mo., says that all property needs to have eye appeal. In his experience the price has taken a hit when nothing has been done to improve the looks of the property.
2. Choose the marketing method.
“When times are good, selling a farm (by owner) works well. There are usually neighbors who are willing to buy the land," said Crawford. In tougher economic times marketing is key and many individuals do not have the resources to market real estate to a large number of potential buyers. Additionally, unfamiliarity with market prices can lead to disappointment by pricing property too high or too low.
3. Pick a reputable real estate company.
The criteria for choosing a company to list or auction your property are the same. “Look for an aggressive company that does a lot of advertising. The company should strategically market properties,” said Kelly. He went on to say that many years ago national franchises had an advantage over smaller, locally owned businesses. Now, access to the internet has leveled the playing field and smaller companies can offer just as much advantage as larger ones.
Many of the local companies have generations of experience to lend to the seller. According to Crawford it is important to deal with a reputable auction company that has been around for a long time. He recommended that both sellers and buyers check with local banks and businesses, such as feed stores, to find a trustworthy company.
An increasingly popular method of selling property is to offer it at auction to eliminate the reams of paperwork associated with traditionally listed properties. “Auctions are the fastest and easiest way to go,” said Crawford.
Buyers come to the sale with money in hand for the down payment (usually 10 percent). The deal is often closed in two to three weeks. Buyers still go through the normal process with a mortgage company, but all of the paperwork has been finalized prior to the sale.
Traditional Real Estate Listing – The primary attraction to listing agricultural land with a broker gives the seller more control over the final price. If the sale is not critical, then the seller has the option to wait until a more desirable offer comes along.
4. Determine Pricing
“Pricing is a key factor to getting property sold,” explained Kelly. Most real estate companies have experience and resources available to recommend the best price to attract potential buyers.
5. Develop a Marketing Plan
Crawford says that to earn top dollar for a property, it is important to work with the agent or auctioneer to develop a marketing plan. The listing or sale should be advertised in major trade papers and the on Internet. The recommended advertising area will depend on the size and price of the farm.
“Splitting a large property into smaller sections will create a larger buyer pool,” said Kelly. But he went on to say that that doesn’t work for every farm.
It’s important for sellers to find a reputable company that can offer strategic marketing, years of experience and plenty of options to guarantee that their needs will be met when selling their real estate.
To get the most out selling a farm research comparable markets to decide which selling option will work best. Above all, make sure that the property is attractive to potential buyers.
