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Land Auctions Drawing Crowds Even in the Slower Market
You are here:   Blog  »  Agricultural Real Estate  »  Land Auctions Drawing Crowds Even in the Slower Market

November 26, 2018 

 

Land auctions in the Midwest normally draw a good-sized crowd. Many local farmers, retired farmers, and landowners attend as well as investors, lenders, and ag vendors. Beings not much land normally sells in a given year in an area, auctions garner a lot of talk and attention. Among the attendees, there are those who are just curious as to who will be bidding, what the land will sell for, and who the buyer will be. Others are there to see what the land sells for and how the auction process works as they are considering a sale of their land. Farmers and landowners are interested in the sales price as they use a current sale to gauge the value of their land assets.

The most active group of auction attendees are those interested in bidding on the land. Bidders have done their due diligence and have decided they want to own the land that is for sale. Auction sales are normally not contingent on financing, so a bidder has already discussed the possible purchase and financing with their lender. Each bidder has an idea of what they think the land will sell for and they usually have a top limit on what they will bid determined either by their own ideas or by financing limits.

One difference with land auctions today during the current slower land market compared to pre-2014 when land prices were rising double digits is that there are fewer active bidders at each auction. This is understandable since land prices have declined since the peak five years ago. But, good quality land has been fairly stable over the past couple of years and buyers continue to bid for it. Buyers are more cautious, but if it is a good quality farm, there are active bidders for it. The key to having a successful land auction at Farmers National Company is to have experienced agents working the local market along with the regional and nationwide advertising and marketing campaigns that bring both local and investor buyers into the bidding.
 

   

Randy Dickhut 

Senior Vice President - Real Estate Operations  

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