With the hot land market right now, it is extremely important for those who want to sell a farm to be sure that they expose it to the whole marketplace and use some type of competitive bidding process so that the potential buyers can establish the high bid.
Knowing the local land market is critical in deciding what competitive bidding process to use. Determining factors when looking at the local land market include the type and quality of land for sale, customs of local land buyers, and expectations of the seller. A sales process that works in one area may not work in another, so it is essential to know the market and land.
One traditional method for competitive bidding is the public outcry auction which is a common way to sell farmland in the heart of the Cornbelt. Today, it is beneficial to do a simulcast auction which broadcasts the live auction to online viewers and registered online bidders who can place bids electronically right along with the in-person crowd. Bids from both online and in-person bidders are posted on a screen for all to see which makes the process fully transparent. The advantage of having online bidding along with the live auction is that it gives the opportunity for interested buyers who could not attend the live auction and it also fosters competition in the bidding.
Other competitive bidding sales methods include online timed auctions similar to eBay. Written bid sales are common ways in certain regions to foster competition among potential buyers. There are variations of bid sales that can be utilized depending on the market and the land being sold. One additional benefit to the seller when using a competitive bidding process to sell their land is that they control most of the terms as these have been set and advertised to the public from the start.
In our current land market where there are more buyers than sellers of farmland, it is wise to consider some form of competitive bidding to market and sell a farm. And it is important to have a trusted advisor and broker like Farmers National Company who can offer the full complement of sales tools tailored to the land and the market in order to get the best price for the seller.