Choosing to Sell Land with an Auction or an Agent?

Choosing the right approach to sell your property is a very important decision. It can make a difference of thousands of dollars. After being in real estate almost twenty-five years, I have seen a lot! I have never understood why so many owners of acreage choose to do an auction on their land compared to testing the real estate market and promoting it to every agent in the surrounding area along with radio ads and print. I look at real estate as an investment and you only get one chance to make the most money you can on your property. Why limit yourself? Is it convenience of one and done? That simply makes no sense to me, especially with land! It is not like you have a lot of people tracking through your home and having to leave all the time, it is land.

There are other options of course besides the auctions or the traditional way of using a real estate agent. Some owners try "For Sale By Owner" (or FSBO) because they think they may have more control over the selling process and feel they are saving themselves money. In my opinion they are leaving thousands of dollars on the table because they did not test the market and use an experienced agent who can open it up to thousands of real estate agents through all our networks, not to mention marketing and advertising. I am always amazed at the calls we receive from someone that hears us talking about a property on our radio shows or commercials that are not even looking to buy, but they hear us describing it and realize that is what they have always wanted.

I realize when it comes to land, in some cases it is inherited, and the family members just want it done quickly and feel an auction is simpler. If we were in another type of market I might agree, but they

are not making more land! It is a sought-after commodity and again you are not being inconvenienced by prospects touring the land. So why not take the opportunity to test the market?

Imagine this scene – you and your siblings have inherited and maintained ownership of your family’s farmland. Maybe your or your siblings have brought up the idea of selling the farmland and using the proceeds from their ownership interest to enjoy retirement, pay off or down outstanding debt, or help other family members. At the recent family gathering you start talking about what are the next steps you should take. After much thought and discussion everyone decides that it is time to sell the property. Of course, the next questions are usually what is the value of the property? Should we obtain an appraisal? Is not the right time, if not when is the best time? Will any of you owe capital gains? Should we sell the farm ourselves, an auction or hire an experienced real estate agent?

The scenario mentioned above is very common and questions that we receive on a regular basis, I am sure resonates with several families that own land. Regardless of what stage of the process you and your family might be in and whether the land will ultimately be sold or remain in the family for a while longer. But, when circumstances lend themselves to the sale of land and the question is asked, “What is the best method to sell our property?” You have several options to consider. Landowners have one chance to sell their property and receive the maximum sale price and that is why it is so important for you to evaluate all your options. Most, if not all, of the farmland and acreage that is marketed and sold in our area takes place via a public auction or a listing the property with a real estate agent.

When The Rick and Tracy Ellis Team list a farm or land, it allows the landowners to maintain control of certain aspects of the sales process and negotiate with a Buyer on price, terms, and conditions of a sale. It always seemed so odd to me why the owners of a piece of property that had been a treasure to a family so many years would not want to be more involved in the process compared to an auction. Rick and I would love the opportunity to tour your land and discuss the best way for you to make the most money. Should the property be sold as a single tract or should we sub-divide the property into separate tracts to make even more money on the property. In many cases we promote the property with several options and test the market to see what the best option is for our client.

As a seller being involved in the transaction, working closely with your real estate agent gives you more options such as, including in the contract specific terms with the sale of the property that could possibly require a leaseback for a period, specific contract terms that might include farming the land, or a specific closing date. When listing the property, you will likely have a longer timeframe to market the property, this allows for land Buyers who are purchasing a property using 1031 exchange funds or clients looking to make a good investment to have an opportunity as well. Although listing with an agent you do not have a set sale date and set closing date as you would with the auction format, you do have a wider marketing window that potentially allows for a landowner to market to a larger Buyer pool.

The approach to selling your land really boils down to the location, the amount of acreage, and the quality of the land for farming or development. Other questions to consider are if the land is in the path of future development or if the property has a higher and better use, such as a building or acreage site. Regardless of which method is deployed to sell your family’s property, the person or company you engage to work with is much more important than the method itself. Choosing a real estate agent to partner with today is challenging, especially when every company will tout their ability to maximize the sales price of your property through their aggressive marketing strategy, their connections with Buyers, and their market knowledge.

As a landowner, ask questions, check credentials, ask to speak with other clients. Regardless of which method is deployed to sell your family’s land, make sure you choose a real estate agent that has experience in getting properties SOLD in your price range. I always say anyone can list a property for sale, but can they get it sold?

Rick and I welcome the opportunity to meet with you and discuss the goals for you and your family and discuss with you how we could help you accomplish your goals. When you list your property with The Rick and Tracy Ellis Team, not only will your property be featured on both of our weekly radio shows, but we will also do a custom commercial for your land to be aired on all three of our radio stations throughout the day that cover most of the state of Missouri. It will also be shared on all of our social media; between our real estate agents and our radio stations we have over 70,000 followers on social media. Not only will your property be featured on our real estate website at www.tracyellis.com, but also on our radio stations site at www.realtalk933.com along with our app that can be downloaded on Apple and Google. The property will also be featured in our magazine with a story about the property and the history. We always say every property has a story and we look forward to telling yours. Contact us directly at 636-299-3702 or email at tracy@tracyellis.com.