Selling farmland is a complicated process that requires expertise to complete successfully. It can be a difficult and emotional decision, particularly if you have a strong connection to the property. But if you have an inherited farm or are looking to sell your own land, there are many things you can do to maximize your sale.
First, determine your farm's worth by evaluating comparable sales and farm income. This requires market knowledge, but also takes into account nuances like soil quality and irrigation. It's a good idea to work with a sales partner who can help you navigate these factors to find the best price possible for your farmland.
Identify the right buyer by understanding their needs and expectations. This will allow you to make an educated decision about whether it's worth it to list your property for sale by owner, or if you need the services of a real estate agent.
Decide whether to sell through an auction or a brokerage. This is a personal decision based on your timeline, the type of property you're selling and what your goals are.
Consider the tax implications of selling your farmland, too. There are many ways to minimize the capital gains taxes you will pay when selling your land. There are trusts, TODs, charitable remainder trusts, and other tax-reduction vehicles you may be able to use that can benefit your overall financial situation.
Look for buyers that are interested in purchasing a piece of your land and have a solid plan for what they will do with it once they own it. This can make it easier for you to negotiate a fair price for your property.
If you own multiple tracts of land, consider auctioning them all at once. Then, you'll be able to set an asking price for each and know that your entire farm will sell. This can also give you more control over when each piece will sell so that you can maximize your profit from your land.
Another option is to sell your land in installments. This can be a great way for young farmers or beginning farmers to get started with their new farm without having to put down a large chunk of cash upfront. However, it is important to consult with your banker and accountant before you decide to sell an installment sale.
When you have the final details of your farm's value worked out, it's time to start putting together a marketing plan. Your agent will take photographs and write a description of your property. They will then upload the property onto their agency's website and affiliate websites, where potential buyers can browse your property.
During the listing process, it's helpful to have your property fully appraised by an independent, certified appraiser. This will allow you to know how much it's worth before you sell, and will provide you with a clearer picture of what your property is really worth in today's market.