Should You Sell or Auction Inherited Farmland?

Should You Sell or Auction Inherited Farmland?

     Farmland can be a confusing inheritance. The land is often in an unfamiliar area, and may come into your possession at an unexpected time. If you’ve already invested in farmland, or were hoping to begin, inherited land can be a great asset. However, if you’ve never had interest in owning or leasing farmland before, selling your inheritance is often the best choice. Land may increase in value over time or be leased to local farmers, but property taxes, upkeep costs, and other unexpected expenses may prevent your inheritance from becoming profitable. For most who inherit farmland, selling is the right choice. Then the question becomes: how can I get the best price for my property?

     Unlike other industries, auction sales are a standard way of selling farmland, not a sign of desperation. Land auctions are red-letter events in the farming community, and a great way to reach many buyers at once to secure the best price for your land.

     However, selling land through a local broker gives you control over the price and sales conditions of your inheritance, and allows you to negotiate with potential buyers in a way that’s just not possible during an auction.


Always Work With A Professional

     When selling land, working with a professional auctioneer or broker is a necessity.  If you choose to sell inherited farmland alone, the task of marketing falls to you. Often, inherited land is far from home, in an unfamiliar market, making it difficult to drum up interest.

     Auctioneers and brokers are already familiar with the local pool of motivated buyers most likely to pay top dollar for your land, and will market directly to them in promoting your land. A professional’s experience and local knowledge will ensure that your property is presented at the right time, in the right way, and to the right people.


Benefits of Auctions

     While auctions may yield bargains in some industries, farmland isn’t one of them. Since auctions are a standard way of selling land, buyers come prepared to spend market value or more on the land they’re bidding for. In an auction setting, buyers do the negotiating themselves, eliminating lowball offers quickly and efficiently. The direct competition between buyers may drive prices higher than market value, meaning a better selling price for you.

     For buyers, a local auctioneer is a trustworthy figure, someone who offers quality land at an honest price. Rather than fretting over whether the land’s list price is ‘market value,’ buyers see the land’s value demonstrated by the market itself in auction.

     Auctions also have the advantage of being held on a set date, meaning you’ll have a better idea of when your property will sell than you would in a traditional sale. Rather than waiting days, weeks, or months for offers that may crumble without financial support, you’ll know that a group of motivated buyers with proven financial means will be bidding on your property on a set date, allowing you to plan for the future with more certainty and security.


Benefits of a Brokerage Sale

     One of the main benefits of selling land with a broker is the ability to set your asking price. In an auction setting, you may have a reserve, but a brokerage sale gives you better control over the final price of your property. If an offer is lower than you’d like, and you know you have other interest, you can comfortably reject it and wait for a better offer.

     Additionally, a brokerage sale allows you to negotiate with potential buyers. Unlike an auction setting, you could send a counter offer with specific terms to entice a buyer, and then meet or exceed your asking price. On the buyer’s side, having time to speak to family and consider options alleviates the pressure from auction sales, where a buyer has just seconds to consider their offer. Having an experienced broker to help with negotiations is essential, and their experience will actively work for you every step of the way. 

     Unlike auctions, there is no set date for a brokerage sale. If you’re in no rush to sell your land, a brokerage sale is a great fit - but this method of selling doesn’t guarantee your land will sit on the market for months.  Rhoades Real Estate & Land Auction Services often has land under contract in a matter of days, meaning that a brokerage sale could be a more lucrative option than an auction, provided you work with the right broker.


Making A Decision

     Ultimately, your needs determine whether you should auction or sell your land, which is why we recommend working with a professional. A local broker or auctioneer - or, ideally, a firm that provides both services - can give you valuable insight on the local market, recent sales, and potential outcomes. Their experience and advice will be invaluable as you decide what to do with your inherited land.

     If you’re looking to sell or auction land in central Illinois, give us a call. Rhoades Real Estate provides both home and land real estate listings, as well as auction services. We’d love to hear more about your property and your goals to help you decide whether selling or auctioning is the right choice for you.