Last week I wrote an article outlining seven things to consider when choosing the best farm or ranch broker. Today I’m going to look at the first three of them in a little more detail. My goal in writing these articles is to help you pick the farm or ranch broker that will give you the best chance of getting the highest price for land when it’s time to sell.
The first three factors I mentioned were whether a broker would: (1) provide you a free market analysis; (2) help you decide whether a private sale or auction would be your best option; and (3) use cutting edge technology to market your property.
1. Free Market Analysis. You can’t rely on gossip and rumors about how much land is going for when you decide to sell. You need a reliable analysis of your land and the current market to determine how much its worth. This is not an appraisal and it won’t be accepted by a bank asking for one. But a quality Market Analysis prepared by a knowledgeable broker will give you a good idea of what your property can be sold for in the current market, and it shouldn’t cost you a thing.
A market analysis (sometime called a competitive market analysis or “CMA”) is be based on a thorough inspection of your property, soil and production data, and other property-specific factors. It should also take into consideration current market trends (up or down) and other properties with similar characteristics recently sold and currently on the market.
A good broker should be willing to give you a free market analysis because he is going to do one regardless of whether you ask for it or not. He needs to know what the market is indicating your land is worth so it can be priced accordingly. Price it too high and the land won’t sell. In fact, it could sit on the market for so long that buyers start to think there must be something wrong with it. Eventually, the price may have to be dropped below the land’s true value just to find a buyer willing to take on this perceived risk. On the other hand, price it too low and … well that’s not good.
Pick a broker that understands the importance of a market analysis and is willing to provide you one for free before you list your property for sale with him.
2. Private Sale or Auction. There are pros and cons to private treaty sales and auctions. Your personal and financial needs, current market trends and your lands unique characteristics will all need to be considered in determining which method is best for you when it’s time to sell your farm or ranch.
Do you need to sell right away? Is there a lot of demand for properties like yours? An auction may be the way to go. If so, are you going to do a reserve auction or an absolute auction? Is there something in between? Maybe the sale of your land is going to require multiple complex contingencies, or you want to be heavily involved in negotiating the final sale terms. A private sale may be best for you.
There are numerous other considerations. Be sure to pick a broker that understands the pros and cons of private sales and auctions, has experience with both, and is willing to take the time to sit down, explain things and help you choose the best method for selling your land.
3. Technology. It is no longer enough to run an ad in the paper and put the word out to the neighbors that your land is for sale. To get the full value for your land it needs to be seen by the highest number of qualified buyers as possible. The most effective way to do that is to use technology. Your broker needs to have a good web site that can be found on Google. He needs to be on Facebook, LinkedIn and Google+. He should have an email marketing campaign featuring your land. He needs to put your listing on the national sites like LANDFLIP, LandWatch, LandandFarm, LandsofAmerica and others. Even if you’re not active on the internet and social networks, your broker needs to be. Check to be sure he is.
Don’t get me wrong, technology is important in today’s farm and ranch real estate market, but it alone is not enough. Ads in the paper, talking with the neighbors and direct mail campaigns can still help to find good buyers. Be sure your broker uses all the tools in the shed.
Next week I’ll write in more detail about the last four factors you should consider before hiring a broker to help sell your land when it’s time.
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