Thinking about selling some or all of your farm land in the future? There are a lot of factors to keep in mind when making a decision like this – and there is a lot that needs to be done in preparation for when the time finally comes.
Pulling the trigger and listing your farm or rural land can’t be done hastily. You have to do your due diligence – just as a buyer will – and make sure you dot your i’s and cross your t’s. What does that entail? Continue reading to gauge whether or not your land is ready to list and start marketing to potential buyers.
Is now a good time to sell rural land?
A lot has changed in a year. For residential housing, the market has shown recent signs of cooling considerably. Interest rates are going up and some buyers are deciding to put off their search for the time being. However, there’s still a housing shortage and the seller with a solid plan and no need to find themselves in a rush may still find that selling now could in fact work out just fine.
The same can be said for rural and agricultural land. In fact, certain global factors play more of a role in farm land than in other real estate markets. Long story short, the right buyer could still be out there for your land. You might just need to be more patient and follow the advice of a real estate professional to get the deal that fits your goals and expectations.
So, it’s always a good idea to sit down and discuss those goals with your family and a trusted advisor. You might find that, yes, now is still a good time for you to list farm land or you could find out that it could be best to wait. If the answer you reach is the latter, then that’s OK. That just means there’s more time to put in any needed work or finishing touches on the property that may help increase the value and listing price when the time does finally come.
What steps do you need to take to prepare to list farm land?
Now, let’s get into what steps you need to take to actually get your property ready to sell. Keep in mind that not everything needs to happen right away, and in fact, there can be some benefit to setting a schedule and stretching out the to-do list.
1. Decide when to list.
First, let’s talk about when you want to list your property. When you are able to control this decision, time of year can make some difference in showing your property at its best.
Luckily, buyers are almost always on the hunt no matter what time of year it is. Fall and winter are no longer the dead periods they used to be thanks to the internet.
Thanks to new technology, buyers can browse a property and see what it looks like year-round – so they aren’t going to put their searches on pause just because there could be snow on the ground or the weather’s too cold to walk the property. They’ll just wait a little bit for better weather and keep their eyes open until then.
If you have the flexibility, the best time to list your property is the time of year it looks best. For some properties, this is when crops are growing or full-grown. Others, including properties with swaths of trees, might look better in spring or fall rather than winter when all the leaves have dropped. Of course, you can also arrange for photos to be taken at any point of the year and make sure photos from those seasons can be posted on listings online.
2. Research what price point you should list at
Perhaps the most important decision any seller of any kind of property needs to make is how much to ask for their land. The listing price is often a first impression and can invite buyers to look further into making an offer or scare them away entirely.
Landowners should have conversations with their accountants and advisors to determine what their land is worth. An appraisal should be done, as should research into comparable farm sales in your area.
3. Gather all your records
Next, you will want to gather together all the records and relevant information that can help you boost your argument for why you might ask for a certain price for your farm land.
This is the kind of information you should have available to be able to ask for the best price:
- Input records, including amount and type of fertilizer used
- FSA programs and any certified acres receiving government subsidies
- Types of crop planted every year and the harvested yields
- Improvements and projects completed that raised the value of the farm or buildings on the land
4. Know your own position
This could be the most important point. To sell land, you have to know what your own financial situation is and what your goal is for the sale.
Are you trying to capitalize on your investment, get an influx of cash or get out from under a situation that hasn’t worked out? Discuss these scenarios with your advisors and family. Be open and honest with everyone, as those folks will be in your corner and want to support you as best they can.
That’s only possible if you equip them with as much information as you have yourself.
Get the Advantage when selling land
The final point of this blog post is to work with a licensed real estate professional who knows rural and agricultural land. In Northwest Iowa, that’s Advantage Realty and Land Management.
Get a leg up on the rest of the market and get the Advantage on your side when you decide to list your farm land or rural property. Advantage Realty and Land Management will work hard for you to make sure your goals are accomplished during any sale of any property in the Northwest Iowa area.
Contact Advantage today!