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4 Common Questions About Farmland Auctions

Monday, August 19th, 2019
property auctions

When you begin selling your farmland, you will probably have many questions. If you have chosen an auction as your means of selling, you may have even more questions. The following can help you understand how to sell your farmland through an auction.

Are auctions only used as a last resort?

This is a common myth that surrounds most types of auctions. An auctioneer can actually help you get more money for your land in most cases. If you choose to sell your farmland through a private listing before an auction, people will already know your top asking price. This could encourage them to bid less at auction. It is true that auctions are great for buyers, as they can get good deals, but most auctioneers focus on providing the seller with a great deal too.

What are the most common types of farmland auctions?

Absolute auctions and reserve auctions are the most common types of auctions used to sell farmland. Here is some important information that buyers (and sellers) should know about these types.

  • Absolute auctions: In this type of auction, the auctioneer guarantees that the farmland will go to the highest bidder. This type usually increases bidder participation, which means you could get a higher price for your land.
  • Reserve auctions: If you sell your farmland in a reserve auction, you can set an undisclosed price. This means that before a bidder wins your farmland, they must reach that price. Setting the reserve price isn’t as easy as marking down your highest asking amount. It should be set at the land’s lowest market value. This helps the auctioneer incentivize bidders to place their bids between the market value and the reserve price.

Remember to choose an experienced auctioneer when you auction off your farmland. Inexperienced auctioneers have been known to change between the two types of auction, which is not legal.

Is it okay to sell farmland that has tenants or crops?

The short answer to this question is yes. Crops can be pro-rated to the new owner and they can be given the right to decide whether tenants can stay or not. The rules for this may depend on local regulations, so be sure to research laws before the auction.

What happens if no one bids at my farmland auction?

You may be thinking that no one will be interested in your land, but farmland holds a lot of value. For your auction to have no bidders, your land would have to be in poor condition or have major issues. The best way to avoid this is to know whether an auction or selling through a listing is your best option.

Are you looking for auctions in Texas?

If you would like to learn more about farmland auctions, or have general questions about these events, give High Plains Auctioneers a call at (806) 244-6776. You can also Contact Us by email for more information on how to Bid and Sell at one of our Auctions.