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.
President - Real Estate Operations