6 Tips Before Selling Your Farm or Ranch
For most producers, their farm or ranch is the largest asset they own. So, when it comes time to sell, you want to make sure it is done right to achieve maximum return on your investment.
Selling land is often an overwhelming task for many landowners, especially if the property was inherited. We asked experts to give us tips on what you should do before selling. Here’s what they said.
Know Exactly What You are Selling
You might be surprised to learn that most landowners really don’t know what they own. Sure they have a general idea but, when it comes to selling that land it’s vital to be certain of all the details – how many acres, where the property boundary lines lie and what easements apply. Having your property surveyed ensures that you’ll know what you are selling, is essential for accurate property valuations and prevents closing surprises that may delay the sale or scare away your buyer.
“In my experience pre-sale surveys are essential for successful sales. Often actual property lines get muddled as ownership transfers over the years.” says Eric Johnson of CJ Real Estate.
This is particularly true for property passed down over generations and in complex land transactions. Pre-sale surveys boost buyer confidence and virtually eliminate problems at closing resulting in higher sale prices.
Make a Great First Impression
The second biggest tip for landowners is to prepare your land to attract buyers for the best price. Curb appeal attracts more buyers and drives higher offers because buyers have confidence – they aren’t thinking about ‘what else’ might be wrong with the property.
You never have a second chance to make a first impression. Shelby Enyart of CJ Real Estate relayed that, “it seems obvious, but many sellers struggle to realize that small changes will build buyer confidence so that their property sells faster and for more.”
Get your land ‘market ready’ by clearing away unwanted or unattractive features. Sell faster and at a higher price by:
- Clearing debris and broken equipment
- Improving trails, roads, and repairing any broken gates
- Mow pastures or fields that aren’t in production
- Trim around all building and clear underbrush
Think About Your Lands Highest and Best Use
Maximize your profit potential by thinking of the highest and best use of the land you’re selling. Think about how prospective buyers most likely use the land? What will attract that largest pool of potential buyers? What types of buyers are likely to place the highest value your land? Common uses include:
- Residential development
- Commercial development
- Ag production
- Recreation
- Hunting
Understanding what potential your land offers, what investors are most interested in your area and, which buyer pools will offer the most per acre will help you to position your land for faster sale at a higher closing price. It will also help you know what’s most important to clear away, update, or add to your land before the sale.
Consider selling multiple tracts to drive a higher total price. You’ll appeal to more buyers, boosting demand. – Gloria Gilliland, CJ Auctions.
Subdividing your land into smaller parcels that appeal to potential buyers with different end uses can significantly increase your total sales price. There are several steps you’ll need to consider before moving forward. First, find out if subdivision is possible. Next, determine what work would be required and what costs are involved. You’ll need to engage a surveyor, who will review your proposed subdivision and coordinate with your attorney.
Understand Which Sales Method is Best for You
There are a host of factors to consider when determining whether you should sell via auction or traditional listing. Your land is unique and seasoned real estate professionals understand that every sale benefits from a custom marketing approach.
Eric Johnson described it best when he said, “every property is unique. We sit with the client and learn everything there is to know about their property…then help them determine the best sale method for their situation.”
Real estate auctioneers and real estate agents possess specific areas of expertise that distinguish their services and benefit clients differently. Auction gives real estate sellers the benefit of a faster sale, competitive bidding, true market value and more control of the sale – you’ll set the date of your sale and create urgent need for your property. Auctioneers are sales specialists and typically only represent sellers. The traditional listing method turns the process over to a real estate agent that sets your asking price, then waits for buyers to come to them and make an offer.
Real estate auctioneers and real estate agents possess specific areas of expertise that distinguish their services and benefit clients differently.
Real Estate Auctioneers:
- Are real estate marketing specialists
- Represent only the seller in a transaction
- Evaluate and establish property value
- Manage complex legal structures
- Give property owners more control of their sale.
- Provide guidance and facilitate legal compliance
Real Estate Agent:
- Are marketing generalists
- May represent both the buyer and seller
- Focus on localized services
- Rely on third-party evaluations
- Estimate asking price then list-and-wait
- Assist with paperwork
Work Smarter, Not Harder
Call a real estate professional. If you are considering selling land – do your homework and interview seasoned professionals with a proven track-record of selling properties just like yours, who knows the industry and the area. Selling land is an in-depth process: you need to be able to price it with the market, provide aerial maps, soil maps, FSA information, crop history, cash rent agreements, boundary lines, etc. Having an experienced pro who knows the area, the market, and where to find this information and make it available to potential buyers, will result in much more successful sales.
“I believe that the most important thing for a seller to do when selling their property is use a land broker who is familiar with the general region and current market conditions of the specific property”. Said Chris Lowers of Grey Partners. “The guidance that a knowledgeable land broker can give to a seller is invaluable to making sure the seller maximizes sale price. This is done through the expertise and market insight of the broker when it comes to the marketing of any individual property.
Conclusion
Invest in the real estate process. Understand all of your options so that you can make an informed decision. Gather all the information you have about your property and have it ready for the real estate broker, auction company, surveyor and appraisers. This makes the process much easier on you and all the parties involved. And, you’ll have less stress and more confidence in your decisions.