An auction provides an excellent opportunity for a property owner to sell farm land. Buyers enjoy purchasing land at an auction through bidding. Farm land is sold as an entire piece of property or as parcels broken down into smaller acreage, such as one to 10 acre plots. The seller is permitted to set the starting bid along with the reserve price on the property. This prevents low bidders who are not serious from purchasing the farm land below its value.
Get a survey of the entire property being auctioned and of the smaller lots. Generally, farm land is auctioned both as a whole and in smaller lots and sold by whichever means makes the most money for the seller. The winning bidder of the entire section is not deemed the owner until all other parcels are auctioned and the figures are combined, determing the best sales route.
Contact an auction company in your area and use an auctioneer. They are experienced and competent in selling farm land at an auction. Also, the auction company will advertise the event, giving the sale of your farm land added exposure.
Prepare your farm land for viewing by interested parties before the auction date. Schedule a weekend for those who would like to view the property. The auction company will print brochures for interested buyers to have during the viewing.
Supply the auction company with a starting bid and a minimum sales price, or reserve price. The auction company generally works off commission, so figure this into your sales price. Also, supply the company with the time limit for the winning bidders to close the sale of the land. For instance, allow the buyers 30 to 45 days to secure financing and close on the farm land.
After the auction winner is determined, request a deposit of 10 or 20 percent from the winner. Acceptable forms of payment include cashier’s check, personal check and cash.
Close the sale of the farm land with an attorney or title company. If the land sold in lots or parcels, attend the closing for each buyer. The attorney or title company contacts you regarding closing. A deed is prepared with the buyers' names, and you sign the closing documents.
Amanda Maddox began writing professionally in 2007. Her work appears on various websites focusing on topics about medical billing, coding, real estate, insurance, accounting and business. Maddox has her insurance and real estate licenses and holds an Associate of Applied Science in accounting and business administration from Wallace State Community College.