Determining the Value of Farmland
Determining the Value of Farmland
This is kind
of an abstract question to which there seems to be no solid answer. More often
than not farmland is bought and sold with no rhyme or reason behind the final
sales price. One farm might sell for much too high while another might seem far
underpriced. However, in my experience, if you take the time to dig a little
deeper into the land quality, location, and neighboring properties, the answer
will present itself.
First and
foremost is quality. What is the soil like? Does the land drain well? These are
probably the two biggest factors in value for a buyer in regards to the land
itself. If a agricultural property contains poor soil and holds water, a buyer
would likely step away.
The other
variable is location. Now, for farmland, a property doesn’t have to be
conveniently located or be highly visible to passersby. In this case, we’re
talking about neighboring owners. This kind of property usually changes hands
once in a lifetime and more often than not there are adjacent or nearby owners
who have had their sights set on a particular tract for years. This kind of
buyer is poised and ready when farmland property comes available and they are
likely not alone. In this kind of scenario, market value of the property is
given little attention and pure motivation for ownership is the only driver of
price.
It is this
exact situation which prompts me as a broker to encourage my farmland clients
to consider auctioning their property. This kind of selling environment
emboldens buyers to bid higher, likely settling at a higher price for owners
than through a traditional listing process.
If you’re
interested in this method of sale or curious to learn your farmland’s value,
let’s connect! Give me a call at 765-427-5052, I’m happy to help.
Comments
Post a Comment