Setting an Auction Reserve Price That Drives Top Dollar

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Selling land at auction is a highly effective way to ensure you get a fair market value – or better. Auction creates the market for rural real estate and offers a transparent and efficient process to connect you to potential buyers. However, an important part of preparing for this process is setting your reserve price—the minimum amount you’re willing to accept for your land.

The reserve price is a critical benchmark that protects your financial interests while also ensuring your real property is attractive to bidders. Setting this price requires careful planning and consideration. Read on to learn how to determine the right reserve price for your land.

What is a Reserve Price?

Before diving into how to set it, it’s important to fully understand what a reserve price is. The reserve price is the minimum bid that the seller is willing to accept for their property at auction. If bidding doesn’t reach the reserve, the land will not be sold, giving the seller control over the ultimate outcome of the sale.

Unlike an ‘absolute’ or ‘no reserve’ where the property sells to the highest bidder regardless of price, having a reserve price in place ensures that your land won’t sell below your minimum price.

Why Setting the Right Reserve Price Matters

Setting the right reserve price for your land is a balancing act. An auction reserve that’s too high is likely to scare off potential buyers, dampen bidding activity and possibly result in no sale. A high reserve often creates the perception that the property is overpriced or that the seller is unlikely to accept any bid, which discourages people from participating in the auction. Setting the reserve price too low might leave money on the table, failing to maximize the value of your land. It’s essential to find the sweet spot that ensures competitive bidding while protecting your financial goals.

By setting the reserve price strategically, you create an atmosphere of excitement and opportunity, attract the largest potential buyer pool, entice people to engage in bidding wars and drive up your final sale price. Collaborating with experienced auctioneers helps you strike the balance between attracting interest and optimizing the value of your land. They will help you assess market conditions, analyze comparable sales data, and guide you in determining a reserve price that aligns with your goals and resonates with potential buyers’ expectations and capacities. With the right reserve price, you enhance the chances of getting top dollar.

Steps to Set a Reserve Price

First, understand your land’s market value.  The starting point for setting your reserve price is knowing the fair market value of your land. This depends on several factors, including location, condition, acreage, soil quality, zoning, water rights, accessibility, potential uses and neighboring properties.

Experienced land auctioneers understand local markets and can offer insight into how your property fits into buyer demand. They’ll assess your land’s unique qualities and analyze recent sales of similar properties to understand what buyers are currently paying for land with comparable features.

Take these steps to become comfortable setting your reserve price:

  1. Consider your financial goals. Think about what you need to achieve financially from the sale. Ask yourself questions such as: What is the lowest price I’m comfortable accepting? Does this sale have specific financial obligations tied to it (e.g., paying off a loan, reinvestment goals)? Establishing these benchmarks can help guide your reserve price decision.
  2. Evaluate unique selling points. Does your property have features that will drive up demand? Examples might include prime soil for farming, abundant water access, or existing fencing ideal for cattle grazing. Highlighting these features during the auction can impact bidder interest, potentially influencing your reserve price.
  3. Assess current market conditions. The agricultural and real estate markets can fluctuate based on broader economic and environmental factors. For example: Are land values in your region trending upward or downward? Is there high demand for farmland or development land in the area? Staying informed about supply and demand dynamics can help you gauge whether to set a more aggressive or conservative reserve price.
  4. Factor in costs and liabilities. Keep in mind the costs associated with selling your land, as this might influence your reserve price. These costs can include auctioneer fees, legal fees, title searches, and paying off any outstanding property tax or liens. If the land has maintenance requirements (e.g., erosion control, invasive plant removal), you may need to incorporate these factors into your reserve.
  5. Be Open to expert advice. While you might have an idea of what you want from the sale, it’s always wise to listen to professionals. Auctioneers, land agents, and appraisers are well-versed in local market trends and bidder behavior. They can help refine your expectations, ensuring you set a reserve price that strikes the right balance.

Common Mistakes to Avoid When Setting a Reserve Price

  1. Setting the reserve too high. An overly ambitious reserve price might prevent bidders from entering the auction, leaving you with no offers at all. Remember, the goal is to generate competitive bidding that pushes the final sale price upward.
  2. Forgetting to factor in market trends. Failing to account for current market demand (or saturation) may leave your reserve price out of sync with potential buyers’ expectations and capacities.
  3. Not Revealing the reserve strategically. While it’s common for the reserve price to remain private, some sellers and auctioneers choose to hint at its range to encourage bidding activity. Discuss with your auctioneer the best strategy for your specific situation.

Key Takeaways

Setting the reserve price for your land is a crucial step that requires careful planning and collaboration with experts. By understanding your land’s value, staying informed on market conditions, and aligning the reserve with your financial goals, you can maximize the chances of a successful sale.

If you need guidance through the process, partner with a trusted auction company like CJ Real Estate auction. Eric and Ronn will help you make data-driven decisions and secure the best outcome for your property.

5 Common Real Estate Auction Bidding Mistakes to Avoid

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5 Common Real Estate Auction Bidding Mistakes to Avoid

Bidding on real estate, whether a ranch, farmland, or an investment property, can be both exciting and challenging. However, this process often comes with pitfalls that can cost you financially and emotionally if you’re not prepared. Whether you’re a first-time buyer or an experienced real estate investor, avoiding these common mistakes can make all the difference in securing a winning bid and ensuring a successful investment.

1. Failing to Research the Property Thoroughly

One of the most significant mistakes buyers make is placing bids without doing proper research. Each property comes with its unique details and challenges, such as zoning regulations, water access, soil quality, and existing structures. For farmland and ranch buyers, these factors can significantly affect the property’s value and long-term viability.

How to Avoid This Mistake:

  • Visit the property multiple times.
  • Get a professional inspection.
  • Review property records, including ownership history and any liens.
  • Check for any environmental concerns.

By knowing exactly what you’re bidding on, you’ll be more confident in making an informed decision.

2. Setting Unrealistic Expectations

Many buyers enter the bidding phase with unrealistic goals—either expecting to snag the property at an impossibly low price or assuming it will meet all their ideal criteria without compromise. This mindset can lead to frustration and missed opportunities.

How to Avoid This Mistake:

  • Research comparable sales in the area to get a realistic sense of market values.
  • Define your non-negotiables but be prepared to compromise on secondary wants.
  • Set a clear budget and stick to it.
  • While aiming high is great, balancing aspirations with reality will help you stay grounded.

3. Overlooking the Cost of Ownership

Placing a winning bid is just the start of your financial commitment. Many buyers focus solely on securing the property without considering the ongoing costs of ownership, such as maintenance, property taxes, insurance, and operational expenses for farms or ranches.

How to Avoid This Mistake:

  • List all potential expenses, such as upkeep for fences, barns, irrigation systems, and equipment if it’s farmland.
  • Factor in unexpected costs, such as repairs or market fluctuations in crop prices for agricultural property.
  • Discuss your financial capacity with a realtor or financial advisor before making a bid.
  • By understanding the full scope of ownership costs, you can avoid financial surprises further down the road.

4. Getting Emotionally Attached

It’s easy to fall in love with a property, especially a beautiful ranch or a piece of farmland with breathtaking views. However, letting your emotions guide your bidding decisions can lead to overpaying or making unwise compromises.

How to Avoid This Mistake:

  • Approach the bidding process as a business transaction.
  • Set a strict maximum bid amount and stick to it, no matter how much you want the property.
  • Work with a trusted real estate agent who can help keep emotions in check during negotiations.
  • Remember, there will always be other opportunities, and it’s better to walk away than to regret an emotional, overinflated purchase.

5. Failing to Prepare Financing in Advance

Walking into a bidding situation without your finances in order can lead to delays and even cause you to lose the property to a more prepared buyer. Sellers prioritize buyers who have their financing ready to ensure a quick, smooth transaction.

How to Avoid This Mistake:

  • Get pre-approved by a lender to understand your borrowing capacity.
  • Have proof of funds ready, particularly if you’re making a cash offer.
  • Understand the terms of your financing, including interest rates and repayment timelines.
  • Being financially prepared signals to the seller that you’re serious and can speed up the closing process.

Closing Thought

Investing in real estate, especially farmland, ranches, or other large properties, is a rewarding but complex process. By avoiding these five common mistakes, you can make smarter, more informed decisions while bidding on the property of your dreams. Whether you’re a rancher expanding your operations, a real estate investor looking for the next opportunity, or a farmer buying your first field, preparation and mindfulness are key.

If you’re ready to take the next step, work with a trusted real estate agent or consultant who specializes in the type of properties you’re interested in. With the right guidance, you’ll be well-positioned to bid strategically and secure a winning deal.

Looking to Sell Your Land? CJ Real Estate is Here to Assist

At CJ Real Estate, we specialize in selling ranch, residential, and commercial land. Whether you’re looking to sell quickly through a high-value auction or prefer to list and wait for the perfect buyer, our experienced team delivers tailored solutions and a track record of success. When you need results, trust the proven expertise of CJ Real Estate.

2025 Land Value Expectations

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2025 Land Value Expectations: What Ranchers, Landowners, and Investors Need to Know

As we head into the new year Landowners, ranchers, farmers, and investors alike are focused on the latest value projections. The good news? Stability continues to define the market, providing confidence for stakeholders navigating this competitive space.

Land values and buyer interest remained robust in 2024, despite challenges posed by lower commodity prices and a slower economy. Experts predict this strength will not only be maintained but could see modest growth as broader economic conditions improve due to lower interest rates, lack of supply ad excellent incomes over the past three years.

Market Insights from Industry Experts

“It’s always tough to predict land sales on a given day,” says Ronn Cunningham of CJ Auctions. “Our 2024 sales consistently exceeded seller expectations. Other brokers reported inconsistent results. I expect to see land prices stabilize with modest improvement as the economy continues to improve post-election.”

This perspective aligns with broader market trends. Land pricing volatility from 2021-2023 calmed down in 2024 with high-quality agricultural land commanding consistently strong values. Average price-pre-acre for raw land or lower quality ag land has fallen slightly. This moderation highlights the market’s resilience, particularly in regions like Oklahoma and Kansas, where demand remains high.

Declining Supply Meets Strong Buyer Demand

One notable trend in recent years has been a reduction in the overall number of properties for sale. Over the past three years, listings have dropped by 22%. Despite the tighter supply, demand continues to thrive, driven by both cattle and crop producers as well as institutional investors increasingly recognizing the value of agricultural land.

High-quality family farms and ranches have emerged as enduring favorites in the buyer landscape. These properties are not only maintaining their value but, in some cases, are poised to see modest increases as competition remains healthy.

Standout Regional Value Growth

Regional markets tell a particularly compelling story. Oklahoma and Kansas pastureland values shone bright in 2024, and that momentum is expected to carry through 2025. Nationally, pastureland values grew by 5.2% on average last year, but Oklahoma and Kansas outpaced the trend, achieving an impressive 9% average annual value growth across the south-central region.

Additionally, cash rental rates further boosted landowner returns. Oklahoma led the nation with a remarkable 10% increase in cropland cash rental rates in 2024, further cementing its position as a leader in the agricultural land market.

Key Takeaways for 2025

For those involved in or considering entering the ag land market, here are the main points to know:

  • Expect Less Volatility: Despite economic fluctuations, the agricultural land market remains stable, with modest improvements expected into 2025.
  • High-Quality Land Holds Strong: Properties with strong agricultural value, such as family farms and ranches, are maintaining high demand and value.
  • Regional Bright Spots: Oklahoma and Kansas continue to lead the way in terms of growth and strong returns in both land value and cash rental rates.
  • Supply Challenges Persist: With fewer listings on the market, opportunities for land acquisition are becoming increasingly competitive.

Looking Ahead

The 2025 market outlook offers optimism for ranchers, landowners, and investors. Stability coupled with continued regional growth suggests strong opportunities for those looking to invest in high-quality properties or maximize value from existing holdings.

Whether you’re actively participating in the market or simply keeping an eye on trends, staying informed has never been more critical. By understanding the forces shaping the land market, you’ll be better positioned to make savvy decisions in the year ahead.

Thinking of Selling Your Land?  CJ Real Estate Can Help

We are real estate experts specializing in ranch, residential and commercial land sales. Whether you need to diversify assets quickly for top-dollar via auction or are prepared to list and wait for a buyer to come to you, the CJ Real Estate team provides comprehensive solutions and proven sales performance. When results matter, choose CJ Real Estate.

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Step-By-Step Real Estate Auction Guide

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A Step-By-Step Guide to the Real Estate Auction Process

Navigating the real estate market can be a complex endeavor, but choosing to sell your property through an auction can streamline the process and potentially yield excellent results. Auctions offer an efficient, transparent way to sell real estate, ensuring your property is presented to a competitive pool of potential buyers.

Real estate auctions work because they create urgency. An auction date and time motivates potential buyers to act. The process is truly hands-off for sellers. And, sellers to dictate when, where and how the sale will happen.

“Once they (CJ Auctions) came in, it all just happened so quickly and so professionally. We were just kind of left with our mouth open because we didn’t expect it to go so smoothly and so quickly. And they took care of everything. All I had to do was show up at closing. I will be forever grateful for what they did for our family.”

 – Kary Warren, Lamb Ranch Trustee.

Property owners benefit from selling real estate at auction because they can minimize carrying costs, eliminate risks associated with pre-sale inspections and know when their property will sell. Additionally, there is no need for extensive repairs or upgrades because property offered at auction is typically sold ‘as is, where is’ meaning that bidders are offering to buy the property in the condition it is in on sale day. There are no sale contingencies and no negotiating.

Competition assures that owners are getting the best price for real estate at auction. At auction you get competing offers all at once. Each bid is simply an offer to purchase. The sales price is determined by competing bids that go up, not down.

Here’s a comprehensive guide to understanding the auction process from start to finish.

Discovery – Initial Consultation

Your auction journey begins with an on-site visit to learn about your property, the local real estate market and most importantly, your goals and objectives. This meeting serves as a foundation for the entire process:

  • Discuss your goals and which sales method – auction or listing – is the best fit for what you want to accomplish.
  • Discover what’s unique about your property, gain an overall understanding of your real estate asset and assess your property’s potential value.
  • Outline the auction sales process including deliverables, timeline and post-sale activity.
  • Address any remaining questions you or your family may have about the process, risks and benefits thoroughly with your real estate team.

Seller Responsibilities

Property owners selling via auction have similar duties to those in any real estate transaction.

  • Affirm property details such as shared ownership, legal descriptions, right of ways, acreage, etc.
  • Disclose financial details about existing mortgages, liens, etc.
  • Disclosure of any known hazards or defects.
  • Make the property available for pre-sale work, inspections or open houses during the marketing period. A key difference with auction is that inspections/open houses are typically limited to 3 or less and scheduled ahead of time – no last-minute showings.

Auctioneer Responsibilities

  • Keep you advised and informed with responsive communication throughout the process.
  • Set the auction date, time and location.
  • Package your property for maximum pricing potential through parceling.
  • Determine if a land survey is necessary and, if so, manage the survey process.
  • Organize all relevant property documentation, disclosures and other legal paperwork.
  • Prepare marketing plan and manage marketing process.
  • Organize and manage your real estate auction and sale process.
  • Organize and manage real estate closing.

Marketing

A strategic marketing plan is crucial for drawing in potential buyers. The tactics employed to market your property typically include:

  • Professional photography and videography showcasing your property through compelling visuals.
  • Custom webpage illustrating your property.
  • Online listing placements on real estate websites such as Zillow & Realtor.com.
  • Social media campaigns that engage audiences and generate interest.
  • Email marketing to targeted buyers, investors, brokers and related professionals.
  • Print advertising in local newspapers and select industry publications.
  • On-site signs and off-site directional signs to inform and attract local buyers.

Inspections and Open Houses

Inspections and/or open houses are a pivotal part of the auction process, offering potential buyers the chance to view the property firsthand. A key benefit of selling via auction is that these are typically limited to 3 or fewer and they are scheduled as part of the marketing plan so that you can plan and never have to hassle with a last-minute call to show your property.

  • Inspections and/or open house events are scheduled on fixed days and times and promoted as part of your marketing plan. Typically, there are 1 or 2 events prior to sale day and 1 event on sale day.
  • A representative from your real estate auction will be present to answer questions and offer details about your property during a set time period. They’ll collect feedback from attendees to gauge interest and address any potential issues that may impact your sale.

Auction Day

The entire process comes together on sale day.

  • Your real estate auction team will set up the property for sale posting additional sale day signage directing prospective bidders to the auction.
  • Prospective buyers will be able to arrive at least one-hour prior to auction time to inspect the property, register to bid, and ask any questions about the property or auction process.
  • At auction time, the auctioneer will make pre-auction announcements reading the sale terms, conditions, and disclosures into the record. Then your auctioneer will ask the audience if there are any questions for the record.
  • Once all questions have been answered, the auctioneer opens the competition with an initial starting bid.
  • Potential buyers make successive bids, each higher than the previous one. It’s a fast and exciting pace. Auctioneers typically work with a team consisting of the auctioneer, ringmen and an auction manager.
  • Your auctioneer will generate maximum value for the property by expediting competitive bidding while ensuring a transparent and fair process for all bidders.
  • The bidding process continues until a high bidder is declared.
  • If there are multiple property/parcels, the successful high bidder wins the right to choose a property/parcel or properties/parcels from a grouping of similar or like-kind properties. After the high bidder’s selection, the property/parcels they chose are deleted from the group and the bidding commences for any remaining property/parcels.
  • The bidding process continues until all properties/parcels have been sold.

Post-Auction

Immediately following the auction, high bidders will meet with the auction manager to complete the sale.

  • High bidders will sign the purchase agreement and pay a non-refundable deposit.
  • The auction manager will review the closing process and answer any buyer questions.
  • The auction manager will then expedite the closing process. Settlement typically occurs within 30 to 45 days of seller acceptance.

Conclusion

Selling your property at auction can be a powerful method for achieving a successful and timely sale. Understanding each step ensures you are well-prepared and can collaborate effectively with your auctioneer to maximize the benefits of this sales approach.

If you have questions or need further assistance about selling your property at auction, don’t hesitate to reach out. We’re here to guide you through the auction process and help you achieve the best possible outcome.

Stay tuned for our next post, where we’ll provide tips on preparing your property for auction to ensure it looks its best and captivates the right buyers.

Keys to Land Auction Success

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Successful land auction buyers understand that strong pre-auction preparation is essential to buying land at auction. In this article, we’ll review keys such as pre-sale due diligence, bidding strategy, financing, auction communication and the process for closing on the purchase after the auction.

 

Auction Due Diligence

Because land offered at auction is sold ‘as-is’, it’s vital that you fully understand what you’re bidding on. Ensure that what you think you are bidding on matches what they’re selling by reviewing the documentation physically inspecting every parcel.

Review the auction terms and conditions. Most will include an ‘as is’ or ‘as is, where is’ clause. These are real estate term used to communicate that the property being sold is not subject to financing, inspections or any other contingencies – the property will be sold in its current condition (regardless of what the condition may be), and the seller won’t be making any repairs, updates, or remediation before closing.

Never assume. Land that’s been in one family for generations may have been split and parceled multiple times over the years. Often, current landowners are surprised to find that what they think they own is very different from what they actually own. It’s not uncommon for fence lines, legal descriptions, and actual survey boundaries to be different.

Confirm acreage amounts. Reputable auctioneers will provide documentation of how the acreage is determined – survey or legal description – in the sale documents. It’s vital that you know exactly what you’re bidding on. If you don’t see it, contact the auctioneer and request that information.

Know the asset. Online records and GIS mapping help you better understand the property beyond your visual inspection. County assessor’s website will show you the current assessed value, classification, zoning, water lines and tax records. GIS mapping systems such as Land ID, can give you a deep understanding of how the land flow and topography, multiple aerial imagery, approximate land boundaries, designated land use, aquifers, wetlands, FEMA zones, soil maps, city and county lines, school district boundaries, utility easements, transmission lines, conservation easements, oil well locations, railroads, opportunity zones, and more.

Avoid surprises. Buying ‘as is, where is’ also means that any non-real estate sitting on the land on sale day transfers with the land unless previously disclosed as part of the terms and conditions. That means that you could be responsible for removing any abandoned equipment, junk or other items sitting on the land. Review the auction terms and conditions to avoid unexpected hassles and expenses.

Without proper due diligence, you could end up paying for land without acquiring it, paying property taxes on land that you don’t own, or failing to leverage acreage you never knew you owned.

 

How to Value Land

The comparable sales approach to valuation works well for residential homes but this method falls short in determining the value of assets like land. Land is typically offered for sale at auction because the auction method delivers true market value for the seller. There’s no guessing at a listing price. No fear of setting the asking price too high or too low.

Every piece of land is unique. Savvy buyers know that they must determine the value of the land for them – rather than presume the value is universally accepted. Start by identifying your short and long-term goals land ownership goals. This will help you determine the type of land you need and shape your valuation. Consider the following:

  • What are the best uses of the land?
  • What improvements and structures are on the land?
  • How does the location, condition, utility access, transportation infrastructure, market velocity, and current zoning impact potential land uses?
  • Will the factors above eliminate some potential bidders? If so, how does that affect the value?
  • What will you use the land for?
  • What improvements and structures are needed for your uses?
  • Are there multiple uses for the land and which of these can produce income?
  • Are you planning to purchase the land as an investment? If so, what’s your turn-around timing?
  • What is your land exit strategy?

Understand Auction Bidding

Auctions can be as unique as the piece of land you’re bidding on. They can be held in-person, online, via telephone or a combination of all three. And there are a variety of sale methods that bidders must understand to bid with confidence.

Marketing materials should clearly outline when, where and how to bid. Request help from the auction team to ensure that you understand every aspect of the process. Be sure to reach out to the auction staff well in advance of the auction because once the bidding starts, the action is fast and intense.

Reserve or No-reserve Land Auctions

Land may be sold with or without reserve. Reserve refers to the minimum bid the seller is willing to accept.

Land sold without reserve will be sold to the highest bidder or bidders. These are also referred to as an ‘Absolute Auction’ or ‘No-Reserve Auction’. It is called an ‘Absolute Auction’ because the property will absolutely sell to the highest bidder.

The sale terms and conditions should disclose if a property is offered with a reserve. The actual amount of the reserve may or may not be disclosed.

 

Land is Sold by a Variety of Auction Sale Methods

Choice Auction:

Also known as ‘Buyer’s Choice By The Acre’, this traditional sale method is used when more than one land parcel is being offered at the same auction. Bids are made on a per-acre basis. It’s a straightforward, easy to understand, and fast sales process for bidders and sellers.

Bidding starts low. Bidders compete by raising the bid against each other until a high bidder emerges. The successful high bidder then chooses which parcel or parcels they want from a grouping of similar or like-kind properties. After the high bidder selects the parcel(s) they want, those parcel(s) are removed from the available parcels and bidding commences for the remaining parcel(s).

The high bid is multiplied by the number of acres to determine the sales price.  For example, if the high bid is $4,200 on a 100-acre parcel of land, the sales price is $420,000.

Multi-Par Auction:

This auction method establishes a price for each tract before the auctioneer starts the bidding. Bidders identify what parcel or parcels they want to purchase. Then large multi-parcel bidders compete with small individual parcel buyers. This process often takes several hours. Bidding ends once no new bid raises have been placed within a specified time frame. The property is sold to the tract combination(s) that produce the highest total sale price.

Dutch Auction:

Rarely used in land auctions, this is a sales method in which the price on an item is lowered until it gets a bid. The first bid made is the winning bid and results in a sale, assuming that the price is above the reserve price. This is in contrast to typical auctions, where the price increases with each bid placed.

Sealed Bid Auction:

This method involves setting a date that all offers must be submitted by. This period is typically less than 60-days. Sellers receive multiple offers that they can analyze and respond to resulting in the potential for post-offer negotiations.

 

Land Auction Bidding Strategy

Auction creates true market value – the property is sold for exactly what people are willing to pay for it. But, not every property is worth the price it’s bid up to. The energy and competitive energy that auctions generate can lead to impulsive decisions.

Bid Limit:

Set a firm budget and stick to it. If the bidding surpasses your bid limit, walk away. Avoid letting the excitement of the auction sway your judgment.

Bid Psychology:

It’s the auctioneers job to create competitive energy. Great auctioneers do more than manage the process; they work the crowd into a frenzy of competitive energy. Accordingly, savvy bidders are able to use that intensity to their favor.

Bid with Confidence:

If nobody else bids when the opening bid is announced, take the initiative and offer the minimum bid. Be patient. Wait for the competition to show themselves. When you do bid, be forceful with your voice and body language to announce that you mean business.

Bid Ruthlessly:

Once bidding starts, stay quiet. Gain a feel for the other bidder’s intensity and watch for others surveying the competition too. Entering your own bids will only increase the competition and may drive the price up.

Wait until you feel the competition is cooling off and only one bidder remains. Let the auctioneer say, “going once, going twice” before announcing your bid. Then forcefully announce your bid and, make the raise increment substantially higher than the last bid. This technique can demoralize or take your opponent by surprise and immediately end the bidding process.

Bid Unpredictably:

Avoid bidding in consistent, round numbers. It’s a small detail that wins more auctions. Always raising your bid in the same increment and stopping or hesitating your bid at a round number reveals your true intentions to your competitors.

Keep bids low by eroding their confidence. Raise your bid by different amounts each time. Mix up your bid increments so that your opponents can’t figure out your bid limit. Think about it, if you raise the bid by $1,000, then $500, then $100, and then $50, your opponents will bid more confidently knowing that your bid limit is near.

People love round numbers. Avoid that trap. Know your maximum, but don’t make it predictable. For example, if you decide that the property is worth $200,000, set your budget at $200,250 rather than a figure that is an even thousand. When a bidder stops bidding at a round number it’s a good indication that they’ve reached their limit.

 

Be Prepared on Auction Day

After performing your due diligence, evaluating the land, setting your budget and honing your bid strategy, you’re almost ready to place your auction bids.

Confident auction communication is your next critical element and that begins by understanding the auction process.

Plan to arrive early on sale day and register as soon as you arrive. Introduce yourself to the auction staff and ask questions. This signals that you’re a serious buyer and will result in you being able to gain the auctioneer or ringman’s attention when you need to.

You’ll likely receive a ‘sale-day information packet’ when you register. Carefully review it. This is where you’ll find last-minute changes or new property information. The auctioneer will likely read this information verbally into the record before the auction, then ask the crowd if there are any questions. Don’t be shy. Ask questions and clarify any discrepancies. Ensure that you know what you’re bidding on.

Once the auction begins, record the price per acre and total price of every parcel being sold. Typically, bidders will select the most valuable parcels first, and pay a higher price-per-acre for them. It’s common for parcels offered in the same auction to sell at very different prices per acre. Knowing which parcels are most valuable to you will help you avoid overpaying.

If you’re feeling confused during the auction, request clarification from the auctioneer. Auction companies understand that buying land is a major decision and want bidders to bid confidently. If at any time you need to ask a question, it’s absolutely okay to signal the ringman or ask the auctioneer directly. Be clear and forceful. Stand up if you need to. Be certain that your actions aren’t mistaken for a bid.

 

Closing on Your Land

Immediately after the auction, head over to the sale managers table to place your earnest funds and complete all contracts.

Once the purchase agreement is signed, be sure to note all contact info for any business partners, including accountants and attorneys, and retain your copy of the agreement.

Pay attention to the closing terms and conditions. Ag land that’s in production at the time of sale may have disclosures that allow the seller to stay in production until the crop is harvested.

For reserve auctions, the seller or seller representative will normally have up to 10 business days to confirm the sale. Closings are typically scheduled between 30 to 90 days after the auction.

 

ABOUT CJ AUCTIONS

CJ Auctions is the leader in real estate auction partnering with ranchers, landowners, trust attorney’s and investors throughout the central United States. Specializing in ranch, residential and commercial land transactions, the CJ Auctions provides comprehensive solutions and proven sales performance.

Investment Funds are Plowing into Farmland

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Investment Funds are Plowing into Farmland  – Here’s Why

Investment funds are buying vast acres of crop and pasture land as they project land values will continue to grow exponentially. What does that mean for independent producers and why is this happening now?

Reuters recently reported that between 2008 and Q2 of 2023, the amount of farmland and agricultural real estate owned by investment funds increased by 231%. The number of acres owned by foreign entities increased 64% to about 40.8 million acres between 2010 and 2021, with the value doubling to about $72.5 billion, according to the most recent USDA data available.

Eric Johnson, co-founder of CJ Real Estate, a land auction company, said that when investors enter the land market it drives up the price per acre establishing a new cost baseline for everyone.

The average age of farmers and ranchers has been rising for years. “Land costs are a substantial barrier for young producers,” said Troy Shelby, President of the Oklahoma Cattlemen’s Association. It’s a significant challenge for family-owned operations. If the next generation doesn’t want to continue the operation, someone is going to buy that land.

Land Values are Growing

Strong demand has been driven by high commodity prices as well as institutional foreign and domestic investment. According to USDA 2023 reports:

  • For U.S. pastureland, the average value in 2023 was $1,760 per acre, a $110 increase over 2022 and a 66% increase since 2009.
  • The average value of U.S. cropland (irrigated and non-irrigated) was $5,460 per acre in 2023, increasing 8.1% from 2022. From 2009 to 2023, cropland value increased 107%.
  • For pasture, the average value at the state level ranged from $490 per acre in New Mexico to $16,600 in New Jersey. The change in value ranged from a 1.5% increase in Wyoming to a 16.2% increase in Kansas. The Northern Plains region (Kansas, Nebraska, North Dakota, and South Dakota) had the highest increase in pasture value per acre at 13.5%.
  • At $155 per acre, the average rate to rent cropland in the United States in 2023 was $7 higher than in 2022. The average rate per acre for irrigated cropland was $237 (up from $227 in 2022) and non-irrigated cropland was $142 (up from $135 in 2022). For pastureland, the average rental per acre at $15 is up $1 from 2022. Among states, the rental cost per acre in 2023 ranged from $34.50 in Oklahoma to $347 in Arizona for all cropland.

Doing More with Less

Some producers say the best way to farm and ranch is the way it’s always been done, doubling down on techniques and values that have served them for years. Savvy farmers and ranchers understand that sustainability is key to improving production efficiency so that they can maintain profitability and meet growing food demand.

Farmers and ranchers today are doing more with less thanks to innovation and technology. In fact, U.S. agriculture would have needed nearly 100 million more acres 30 years ago to match today’s production levels. Smarter equipment, precision tools and biotechnology are helping agribusiness produce more, while using less water, fertilizer and pesticides.

From climate-smart farming practices to voluntary management of forests, grasslands, wetlands and croplands, farmers and cattlemen are not only reducing their footprint, but also are actively absorbing carbon from the atmosphere.

According to the EPA, land management practices alone removed 764 million metric tons of CO2 from the atmosphere in 2018. That is equal to taking 165 million vehicles off the road for a year. And, U.S. livestock emissions are declining thanks to improvements in feed and production and currently make up less than 4% of overall emissions.

Demand for carbon offsets from agriculture has grown significantly in recent years. But the current process is cumbersome, confusing and offers limited return on investment with high transaction costs which limits farmers’, ranchers’ and foresters’ participation. According to a recent U.S. Agriculture Department study, only 3 percent of farmers, ranchers and landowners are using available carbon credit programs that pay them to remove carbon dioxide from the air and sequester it in the soil. Producers who want to participate must hire private parties to help them adopt the right conservation practices and verify that certain processes and protocols were followed in implementing those practices. And accreditation of these private carbon credit management companies is murky at best adding more doubt to an already murky process.

Sustainability Incentives and Assistance

There are a variety of programs designed to help farmers and ranchers incorporate more sustainable practices into their operations. Here are a few of the most active and interesting:

  • Through the Rural and Agricultural Income & Savings from Renewable Energy (RAISE) initiative, the USDA aims to help individual farmers deploy smaller-scale wind projects using USDA’s Rural Energy for America Program (REAP) which provides $144 million in grant funding for underutilized technologies.
  • The DOE is providing $4 million in funding related to REAP, including $2.5 million to support the testing, certification and commercialization of the latest distributed wind technologies including for the agricultural sector, and $1.5 million to support outreach and the identification and development of new business models for farmers to save money and earn income deploying these technologies.
  • The Environmental Quality Incentives Program (EQIP) is a voluntary conservation program that offers farmers and ranchers financial cost-share and technical assistance to implement conservation practices on working agricultural land.
  • AFRI Sustainable Agricultural Systems (SAS) promotes the sustainable supply of abundant, affordable, safe, nutritious, and accessible food and other agricultural products, while enhancing economic opportunities.
  • Equipment Grants Program (EGP) serves to increase access to shared-use special purpose equipment/instruments for fundamental and applied research for use in the food and agricultural sciences programs.

A More Productive Future

Farm and ranch sustainability practices play a crucial role in maintaining the long-term health and productivity of agricultural lands. By implementing conservation measures, landowners can reap several benefits:

  • Improved Profitability: Sustainable practices enhance production efficiency, reduce input costs, and optimize resource utilization. This translates to better financial returns for landowners.
  • Environmental Stewardship: Conservation efforts contribute to soil health, water quality, and biodiversity. By safeguarding natural resources, landowners ensure the resilience of their operations and protect the environment for future generations.
  • Carbon Sequestration: Practices like cover cropping, rotational grazing, and reforestation sequester carbon, mitigating climate change. Agricultural lands can serve as valuable carbon sinks, benefiting both the planet and landowners.
  • Collaboration and Support: Landowners can collaborate with agencies like the USDA’s Natural Resources Conservation Service (NRCS) to access technical assistance, financial resources, and personalized advice. These partnerships foster sustainable practices and address specific conservation goals.

The Long-Term Impact on Land Values

The growing demand for food, renewable energy, and sustainable practices, coupled with limited supply should drive positive tailwinds for agricultural land values over the long term.

Institutional investors know that constants such as global population increase, proportional food demand and urbanization make land investment a stable and profitable investment.

The factors that forge land value are evolving. Independent landowners, farmers and ranchers can make the most of this by diversifying income streams by producing renewable energy, embracing carbon credits, leasing to recreational interests, and incorporating sustainability.

3 Secrets to Buying Exceptional Hunting Land

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How to find and acquire prime hunting land for a lifetime of memories.

Picture it: a sprawling 160-acre tract of prime hunting habitat. A place where cherished memories with friends and family unfold over the years. Trophies adorning the walls, and the potential to create lasting family connections that bridge generations young and old. But before you take aim at purchasing hunting land, ask yourself: Are you fully prepared? What should you think about to make your vision a reality?

Meet Eric Johnson, a seasoned land expert with CJ Real Estate. He’s helped hundreds of people just like you find and develop amazing hunting property. Whether you’re after trophy whitetails or year-round sporting, Eric outlines 3 crucial factors to help you realize your dream.

 

1.      Build Relationships

Networking is vital when searching for your perfect parcel. Build relationships with area local landowners and the people that influence is key.

Most landowners want to know that the land they are selling will be taken care of. They’re often concerned that their neighbors will have a good new neighbor when they sell. When landowners know what kind of person you are, and that you’re interested in hunting acreage, you’re much more likely to know about land before it goes on the market.

Local game wardens are another invaluable resource. They are often intimately familiar with public and private lands. They are usually well known to local guides, landowner and business owners.

Not only can they help you find exactly what you’re looking for faster, they can help you properly develop your habitat and introduce you to local landowners that you may not have met.

2.      Hunt What You Know

If you’re lucky enough to lease or have permission to hunt a tract of great habitat already, look for adjacent property to buy. Chances are the landowner of your current tract will help you connect with neighboring landowners.

While that may sound obvious, the real benefit is buying land that you already know a lot about. The knowledge will save you time and money when it comes time to develop the land as you’ll already have a feel for wildlife populations and their patterns, hunting pressure, disease prevalence, predator populations, bad neighbors and many other things that must be evaluated before making a firm offer.

In the process you’ll make a solid financial investment while increasing your total huntable acreage.

3.      Share the Load

Purchasing hunting property with your friends can get a little messy but the pros outweigh the cons when properly organized. There is a lot of work to researching, buying and developing a productive hunting property. Why not share the load with people you trust?

Ask yourself these questions when buying land with partners:

  • Do you have similar goals, budgets and financial stability?
  • Do you have a shared vision for the property?
  • Do you have a clear plan if the situation changes for one or more partner?
  • Do you have a plan for how to share the land?

Buying and building a great hunting property requires patience. Diligently establish local relationships. Avoid rash decisions. Approach your land search pragmatically. When you’ve found some land, bring in experts. Let them help you fully evaluate the land to ensure that the parcel is a smart financial investment as well as a prime hunting tract. The build your dream retreat and enjoy it with friends and family for a lifetime.

Is Real Estate Auction Right For You?

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Opting for a real estate auction offers the sellers the benefit of knowing the exact date their property will sell, a potentially higher sale price, and a straightforward, transparent buying experience. This guide aims to simplify the decision process by exploring the 5 key questions sellers must answer in order to determine if selling via auction aligns with your needs and goals.

Do you have time to handle the sales process?

Real estate auctioneers typically remove the hassle of selling by actively managing every aspect of the sale from signing to closing. That’s why auction is preferred by trust companies and families handling property sales after a loved-one has passed. Sellers often only need to sign the listing agreement and provide access to the property.

The auctioneers team handles everything from that point forward through closing. It greatly simplifies the real estate process and reduces seller stress.

What’s most important to you: a guaranteed sale or sales price? 

There are two kinds of auctions you can choose from: absolute and reserve. Each has its advantages, and the best choice depends on what you’re looking for and the details of your property.

If you’re aiming for a definite sale, an absolute auction is best. Absolute auctions attract larger buyer pools and generate more excitement because buyers have more confidence in the sale. There is no ‘reserve price’. Buyers know that the property will absolutely sell to the highest bidder. An absolute auction is the “classic” type of auction where real estate is sold to the highest bidder, regardless of the price. There is no reserve price or minimum sale price. Bidding in an absolute auction starts at $0 resulting in fast and fierce competition for quality assets.

If you are risk averse, reserve auction may be for you. A reserve price is the minimum amount that a seller will accept as the winning bid. This prevents a bidder who offers a price lower than what you will accept from winning the auction. Reserve prices are not published. Sellers have the accept or reject the high bid within a designated time period – usually 24 hours. The auction company will work with sellers to set the minimum acceptable sales price. The downside of a Reserve Auction is that they reduce the potential buyer pool and bidding competition because there is no certainty they will be able to buy the property even if they are the highest bidder.

Both approaches can work well, and your auctioneer will help you decide the most suitable one based on what you need for your property.

Is your property unique or hard to value due to lack of comps?

When it’s time to sell, setting the right price can be tricky for any real estate asset. Typically appraisers review comparable properties to determine the value. But, for unique properties such as ranches, farms, rural land or lake homes, the lack of comparable properties makes it exceptionally difficult for brokers, banks, sellers and buyers to assign a fair value range to your real estate. An accurate appraisal of your properties value is only possible with a large data set of comparable recent sales.

A real estate auction as the ultimate way to set true market value. Instead of guessing and setting a price, an auction lets the market decide. It draws in all interested buyers to bid against each other. You get the genuine market value of your property, attract lots of interested buyers quickly and, speed up the selling process. This way, you’re not just getting any buyer, but the one willing to pay the most for your unique property. And you might even find the final auction price surpassing your expectations!

Are High Holding Costs a Concern? 

When your property is up for sale, you’re still responsible for ongoing costs like taxes, utilities, insurance, and mortgage payments. For unique properties in rural areas, sellers often wait for months or years to get an offer through the traditional real estate listing sale process. Sellers are forced to pay for all of the expenses of holding the property. Often maintenance is a significant issue for unoccupied homes and buildings – little issues become big problems because no one is there to stay on top of it.

The longer it remains unsold, the more expenses you accumulate. Selling through an auction can speed up the sale process, helping you save money and swiftly move into your next home.

For landlords facing rental properties that cost more to maintain than they earn, or require significant repairs, selling via auction could be an effective solution. It’s a quick way to offload these properties, potentially increase your profits, and free up resources to expand your investment portfolio.

Homeowners facing unexpectedly high costs, such as large utility bills, HOA fees, or maintaining a property that’s too large, could benefit from a quicker sale through auction. This approach could help manage expenses more effectively.

Do you want to sell quickly, with no inspections, repairs or negotiations? 

If so, real estate auction is for you. Properties are sold at auction in as little as 30-days. And, the winning bidder must be willing to accept the property as is. Buyers can’t ask sellers to do extra work or pay expenses on the property. A property sold at an auction isn’t tied to an appraisal, inspection, or mortgage. There also can’t be any conditions or contingencies from the bidder upon selling.

Real estate is sold at auction in ‘as-is’ condition – no contingencies, no inspections and no repairs. Buyers are responsible for inspecting the property and committing to buy the property ‘as it stands’. Sellers do not need to make repairs or improvements.

There’s no negotiating. Real estate auction removes the hassle of negotiating when you sell. No inspections or appraisals are required. And, closings as fast and typically surprise free.

Is auction right for you?

Real estate auction offers the benefits of a quicker sale, higher sales price and a simple transparent sales process.

Analysis of 25 academic studies reveals that property auctions consistently produce greater returns than traditional sales through realtors. Several factors consistently emerged as contributors to the higher returns achieved through auctions. These include:

Speed: Sellers control the sale by setting the sale date. They’ll know exactly when the property will sell. There’s no waiting and no ‘hoping’ to get an offer. Auctioned properties typically sell faster than those listed with realtors, reducing holding costs and increase overall returns.

Competitive Environment: The auction atmosphere encourages a competitive bidding environment, resulting in higher sale prices. Analysis reveals that the average real estate auction results in 15% greater total return. Real estate auctions take advantage of current demand by pitting buyers against each other. Sellers benefit from the competition. Buyers to see exactly how much others are offering and adjust their bids accordingly in real-time.

Transparency: Auctions provide a level of transparency that is often lacking in traditional real estate transactions. Traditional home selling methods often leave buyers in the dark, making offers without knowing what others are willing to pay. Sellers simply don’t know what the maximum offer can be so they often have to settle for less than true value.

Fall Real Estate Auctions

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530 total acres and three homes will be sold to the highest bidder as CJ Real Estate offers two cattle ranches for sale this fall.

430 Acre Ranch and Equipment Sells Dec 7th

Beautiful 430 acres prime development land offered for sale in 11 parcels of 10 to 58+/- acres that include land and 2 homes. The ranch offers prime Mount Pleasant development land located adjacent to the Harts Bluff Pre K-12 school complex along FM 1402. 75+ equipment lots will sell at auction immediately following the real estate auction includes a wide variety tractors, vehicles, trailers as well as farm & ranch equipment.

100 Acre Working Cattle Ranch Sells Nov 15th

100 acre ranch for sale offered in 4 parcels of of 3/4 to 50 acres each. Beautifully updated home and scenic land ideal for cozy home sites or continued livestock operation. Ranch features two ponds, fencing and cross-fencing, multiple barns and outbuildings, 4-bedroom home and scenic views. Conveniently located 3-miles east of Wayne, OK.

Image: Eaton Ranch

6 Tips Before Selling Your Farm or Ranch

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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.