Farm Auction Questions. Answered.



From the first time a potential client contacts me and right up until the time the auction starts, there is always a sense of uncertainty.

The owners of the farm are curious:

How does the auction work? If we have a bad day and the price doesn't get very high, are we required to sell? How does the online auction work? What if there are technical difficulties and people cannot bid, what do they do? Who will be bidding on my farm?

We have so many questions.

All these issues are addressed when meeting with potential clients before they ever sign a listing contract.

During this meeting, we typically discuss two factors: how a real estate auction operates, and when people are pushed, they usually pay more than they normally would on a conventional listing.

One common worry is whether they are obligated to sell if the auction doesn’t yield a satisfactory price due to unforeseen circumstances. To alleviate their concerns, I reassure them they are not obliged to sell the property if the highest bid falls significantly below market value. It is worth noting that such situations are rare, having occurred only once in my 35-year career.

During our discussions, I also emphasized the benefits of online auctions over in-person ones. We explore how online auctions attract serious bidders while maintaining privacy, as potential buyers prefer not to reveal their intentions. Additionally, the owners appreciate the convenience of avoiding a crowded room with numerous curious onlookers and only a few serious bidders.

 

The listing contract is signed after the initial consultation, and the questions are answered. The auction date is set, marketing materials are manufactured, and the advertising schedule is initiated. I also personally contact neighbors and farmland buyers known to me for a personal invitation to bid on the property.

Auction day is always stressful, no matter if it's an in-person auction or an online auction… we all fear the unknown. Will anybody show up to bid? Will they bid high enough to satisfy the owner? Will the technology work correctly? Will someone get cute and try to game the system?

 

However, it is all worthwhile in the end. Most of the time, an auction will bring more money to the owners than a conventional listing because of the competition it brings.

If you would like to discuss your farm or simply talk about life in general, please feel free to reach out to me at 765-427-5052.

 

Respectfully

Brad Neihouser

Comments

Post a Comment

Popular posts from this blog

The Family Meeting

  THE FAMILY MEETING   A family meeting? What is it and why would we need such a thing? Well, I am here to tell you that one day there will be a meeting with members of your family and you will not be there. The question is who do you want control of it. Will you or someone else be making the decisions?  Full disclosure, I did not come up with this idea. I read a blog with a similar theme written by a good friend of mine and was inspired. When I approached my wife with the idea of a “family meeting” she was reluctant at first, but as we talked through some of the topics I had in mind, she agreed that it was probably a good idea. When we tossed the subject out to our children and their spouses, they were intrigued and on board.  Let me explain the nature of this kind of “meeting” and why I believe it is so important.  A substantial amount of my commercial real estate business, mostly farmland, comes from families that have experienced the loss of a parent. ...
Read more

The Farmland Market & What it Means for YOU

Image
  The Farmland Market & What it Means for YOU When it comes to the Commercial Real Estate market, what kinds of properties come to mind? I bet I can guess: Retail, Office, and Industrial – The Big Three. However, there’s another sector of CRE that you might not think of immediately – Farmland. If there was ever a market that flew under the radar, it would be this one. While there might be little attention paid to current farmland/agricultural listing inventory, there’s even less paid to who’s buying it.    So, what is the current activity in the farmland market? Recently there has been much doom and gloom surrounding the agricultural sector, especially in the last five years. However, values have remained steady and seem to be trying to push upward again, despite all the negativity. What does all of this mean? How are values trending upward with so little visible activity?   What has been happening behind the scenes? Many agricultural operators have quie...
Read more

Shining the Light on Farmland Leases

Image
  Touching The 3 rd Rail: Farmland Leases   When you think of “top secret” information, what comes to mind? It might surprise you to learn that some of the most closely guarded information in the business world is not a password, account number, or safe combination, it’s Farmland Lease Rates. Bet you didn’t see that one coming. These lease rates are often set and then forgotten, never seeing the light of day again. Surprisingly, there is no clearing house of information or database of comps for landowners & potential tenants to research when trying to determine a lease rate. The agreed upon rates are, more or less, a shot in the dark and sealed with a handshake between friends. I could write a book after all of the issues I’ve helped landowners through when it’s time to renegotiate an existing lease or sell their property and the stories are always the same. Mr. & Mrs. Landowner have leased their farmland to an old friend for years and the lease rate has rem...
Read more