FAQ – Real Estate
- Should I sell my farm or not?
- This is a question only you can answer. A real estate farmland professional, such as Halderman, can help you determine what you might expect in terms of sale price and can describe the current marketplace versus the historical trends. We can also help you think about tax scenarios and family estate planning issues and put you in contact with attorneys or accountants, if needed. Once you have the information you can make a more informed decision on the timing of a sale.
- What is a fair price?
- Prior to selling Halderman can assist you in determining a sale price range and even complete an appraisal, if necessary. Using this information we will assist you in determining an asking price in a private sale scenario and a release price for an auction sale. Of course the fair price is determined ultimately by the market where a willing seller and a willing buyer agree on a price and terms. This can be achieved via a well marketed auction where there are a number of bidders in attendance and active bidding. It can also be achieved via private sale marketing and subsequent negotiations.
- Should I consider an auction or private sale?
- Our recommendation is that you enter the sale process with an open mind. If asked, Halderman will make a recommendation as to which type of sale is best for your farm. This recommendation is based on the method we think can best achieve your goals and the property itself. Some farms naturally lend themselves to one type of marketing system. For example a bare 80 acres in a location that typically has a lot of competition is likely a good auction candidate. In contrast, a highly improved swine operation is probably better sold as a going concern via private treaty.
- How do I know if my farm was exposed to all of the market?
- At Halderman we discuss the marketing plan for your sale at the beginning, in the proposal. A marketing budget and execution plan is developed with your assistance. This generally includes signs, brochures, ads in local, regional and national media, a listing on over 200 websites, including halderman.com, and a large scale direct mail campaign. In addition we work the local market extensively, going “door to door” in some instances to generate interest in the property. If this plan is implemented as planned then you can be assured that your farm reached the current marketplace.
- Should I always look for the lowest bid?
- The old adage “you get what you pay for” is something to consider. Halderman is ranked as one of the top 5 farmland auction companies in the US. In addition when Halderman sells farms outside of IN, IL and MI we partner with another top ten auction firm creating an exceptional team for our seller. We may not always be the “lowest” bid, but we will commit to delivering outstanding personal service, award winning marketing, a vast database of local, regional and national buyers, exceptional “auction day-of-sale services” and therefore the best opportunity to achieve the maximum sales price. Many times the difference of 1% in commission rate equals less than $100/acre and that can equate to one or two bids. Therefore your commitment to one of the best farmland brokerages provides an exceptional return on investment.
- What should I consider as differentiating factors when choosing someone to sell my farm?
- You should consider the entire package offered by the broker. Evaluate their professionalism, their culture, their commitment to your goals. At that point we recommend you evaluate their entire marketing program, their ability to execute, their track record and history of sales and their ability to offer you the private and auction methods. Finally, assuming all stated above is equal, then consider commission rate. A 1% difference in commission is usually less than $100/acre and therefore one extra bidder or interested party easily makes up the difference.
- I prefer to sell my farm as a whole. What does a multi-parcel auction do for me?
- Understandably many sellers wish to see their farm maintained as they have enjoyed it. However once you sell your farm you generally lose the right to say how it is used in the future. It is our experience that to maximize your sale value you need to offer the different components of your farm (cropland, woods, pasture, home, improvements, etc.) in different tracts because there are different buyers for each. For example the local famer may want the cropland and will pay fair market for that. He would take the woods, but only at a discounted value. If we offer the woods and cropland separate we offer the market the opportunity to buy each component separately and therefore the buyer of the woods may be a person who enjoys that type of investment. Ultimately there are good odds the farm sells as a single unit, but during the bid process allowing bidding on the individual tracts tends to generate more competition and a higher sales price for you.
- Does the marketing really matter because the neighbors will buy it anyway?
- It is true that many buyers are the neighbors. Our experience shows that the most successful sales tend to find the ultimate buyer being local. The key to the success of the sale was the “outside’ investors that bid the neighbors to the higher price. Sometimes neighbors will not bid against one another and the outside bidder becomes a key to achieving the maximum value. Yes – marketing does matter as .25% to .5% is a small amount to pay to generate one, two or three outside investors to help your sale reach its full potential.