Timber Lake Topic, March 26, 2020 Read the full article from the Ag Insert of the March 26, 2020 issue of the Timber Lake Topic here.
When is a good timeto sell land?
The best time to sell Ag land is going to depend on yourgoals and reasons for selling. Thataside, here are some additional things to consider.
Winter/Spring and Fall are all good times for sellingland. For cropland, you’ll want to makesure to allow a buyer time to plan for spring planting inputs. This will depend on where you live and theweather conditions that year, which no one can predict these days. Closing can be 30-45 days after the purchaseagreements are signed and since possession is at closing, anything past a Marchsale could be a bit risky. However,sometimes an April sale date can be manageable by offering the buyer theopportunity to put more money down for immediate possession, allowing them toget in the field before closing.
If it’s pastureland you’re selling, then you have a littlelarger time window to work with in the spring.Most folks put their cows out to pasture in the May/June timeframe,which buys you another month or two for a spring sale.
One advantage to selling in the fall is the ability toobtain better pictures and videos of the property for marketing purposes. If you contact an agent in January for aspring auction, your photos may be pretty white! Photos are certainly not the main thing abuyer looks at when considering a purchase, but they certainly do help with eyeappeal on marketing materials. Mostbrokers have software that can provide aerial maps and soil maps forprospective buyers, if photos aren’t available.
If your property has recreational attributes such as heavilywooded areas or ravines where wildlife thrive, then you might consider a fallsale. Spring won’t be a bad time forproperties like this, but sometimes fall can be a better fit as more folks arein that hunting mindset. You may getadditional exposure to folks who come to the area for just that purpose who mayentertain the idea of purchasing their own place for recreational use.
Even if you have no plans to sell in the near future, onething you can do now to prepare for down the road is to take photos of yourland and store them in an accessible location.A broker is going to visit the land a handful of times when preparingmarketing materials and will take quality photos. However, they don’t usually have theopportunity to be there in every season or at the perfect sunset or when thecows are all drinking or the deer are posing.A broker will welcome quality photos from the landowner.
What about political influences? Does that affect the valueand timing of a land sale? This is aquestion I’ve been asked a few times lately, specifically referring to theCoronavirus. And I’ve even gotten a fewquestions about next fall with the Presidential election. Generally speaking, I haven’t seen that theymake a big difference in how the land sells.Most folks who are buying land understand that things like that come andgo, and aren’t buying the land based on a rash reaction to highly fluctuatingmarkets. If the stock market is on adownward path due to fear over a viral outbreak, then land may look moreappealing for those seeking other avenues to invest their funds. A landinvestment can also be attractive, even at a 2.5 – 3% return, when compared toalternative options of CD and T-Bond rates at less than 1%. Land has proven to be a very stableinvestment over time. According to a2017 report*, farmland has achieved a compounded annual growth rate (CAGR) ofmore than 5% per year from 1970 – 2015.
The best thing to do if you’re thinking of selling land isto contact an experienced broker and visit with them. Based on your goals and the type of land youwish to sell, they will be able to provide you with some thoughts andsuggestions to help maximize your results.
Kristen Gill, Gill Land Company
*Farm Foundation Issue Report: Farmland Ownership: Trends & Future Implications by Bruce J. Sherrick, September 2017.
